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Commodity Carnage Will Hurt These 10 States The Most
As we’ve seen in Louisiana and West Virginia, the commodities downturn has had a real impact on state budgets.
Back in April for example, we explained how a sharp decline in oil tax revenue helped push LSU to the brink of bankruptcy and in West Virginia, the impact of falling coal prices has put significant pressure on the state’s books.
The commodities rout can be at least partly explained by a combination of two factors. Slumping demand from China (i.e. a cessation of the bid which, in the pre-crisis world, producers assumed would exist in perpetuity) and easy access to capital markets (thanks to ZIRP) have helped create a global deflationary supply glut which will likely put continued pressure on prices for the foreseeable future. Underscoring the depth of the downturn is the following table from Morgan Stanley:
Amid the carnage, Bloomberg is out with a look at which US states will be hurt the most by the commodities "meltdown." The following map shows what percentage of each state’s GDP is derived from energy, mining, and agriculture:
Here’s more color from Bloomberg:
In the brutal commodities meltdown, all U.S. states are not created equal.
In fact, the impact has been vastly different. The Bloomberg Commodity Index last week reached a 13-year low and has plunged 61 percent since its peak in 2008. That matters a lot in, say, Wyoming, Louisiana, Texas and Nebraska. Not so much in New Jersey or Massachusetts, for example.
Wyoming is home to most of the top producing coal mines in the U.S. Its mining and agriculture industries generated 36 percent of its economic output in 2014, more than any other state, according to Moody's Analytics's calculations using Commerce Department data.
The top nine states on the map got at least 10 percent of their gross state product from energy, mining and agriculture last year: Wyoming, Alaska, North Dakota, West Virginia, Oklahoma, Texas, New Mexico, Louisiana and South Dakota. Another six got more than 7 percent, compared to just 3.9 percent for the U.S. as a whole.
New Jersey, Massachusetts, New York, Rhode Island and Connecticut have almost none of their economies in those industries, just 0.3 percent or less.
A year ago, Federal Reserve policy makers and many private economists viewed falling oil prices as an economic boom that would boost consumer confidence and spending. While there's been some evidence of that in restaurant sales for example, it's been partly offset by the slowdown in mining and farming that has reduced employment in a checkerboard of states.
The commodities collapse has cut monthly employment gains in the U.S. by around 50,000 a month this year, estimates Mark Zandi, Moody's chief economist in West Chester, Pennsylvania.
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Phew! Glad NJ isn't affected. After all, we don't produce anything.
Don't guidos count?
It's funny to see a District that produces absolutely nothing is where your government is located.
Oil prices are falling; the Eagle Ford Shale lay will play out, people don't need that crap from Samsung, either.
There are no jobs for you in Austin, Txas.
Go home!
No government jobs? Or are you just hording?
Good citizens of Metropolis. Oil is dead. Gold is dead. Copper is dead. The dollar is you new king.
Right. QE and ZIRP create over-investment in zombie companies that should have died out long ago, INCLUDING gold miners. There is a massive oversupply of gold, and every other commodity and product. No, gold is not money. It is not legal tender. You cannot go into a store and legally buy anything with it. You cannot pay your mortgage with it. You cannot pay taxes with it. Not yet.
If you want to finally precipitate the crash, take cash out of the bank. They have not printed a single actual new dollar. There's still only 1.3 billion in circulation. If you've bought gold, you've kept that cash in circulation. Taking it out is deflationary. All of the bullshit financial instruments will evaporate.
I live in Taiwan. There is no shortage of gold. Every jewelry and gold store is filled to the brim. No one is visiting them, however. What there is a shortage of is cash. No one has it, and no one thinks to have it.
My government is located in Columbus, Ohio. DC is just the location of an American problem that the states are going to have to fix thru an Article V.
The country itself doesn't produce much of anything, either.
D.C. produces hassles and bullshit.
Those are mostly imported.
The guy you commented earlier with who hates gold is about to lose it all. His comments are full of fear. Guess some must learn a hard lesson.
and Corzine
Commodity Carnage is what they're calling a Depression now?
Talk about NJ. Best tasting tomatoes ever. Now Campbell soup buying 75% of their short lived crop season.
Que? My family relatives have a huge farm in Hammonton and sold to Campbell's directly. Those days of them largely using locally-sourced NJ tomatoes are long gone and have been since the 90s.
Aside from roadside farmers markets, good local tomatoes are tough to find. Still got corn, though.
My great-grandfather lost his tomato contract with Campbell's in 1949.
Fuck Off
Every time I go to Shop Rite, the tomatoes say "Made in Mexico".
Woo hoo!
Although you'd think the Garden State would be a little higher in agriculture.
You forgot organized crime. Possibly the most significant this century to date:
http://www.veteranstoday.com/2015/05/23/mapping-fort-lee-the-truth-behin...
Looks like all the East Coast produces is statists, laws, and too many people. All the resources were exploited a hundred or more years ago.
What would the eastern US look like if it had to stand on its own? I say North Korea.
Let the secession begin. Cut of the commies and the statists before they ruin the rest of the country.
east coast production reminds me of this office space scene
https://www.youtube.com/watch?v=mGS2tKQhdhY
Is this article seriously suggesting that moving to New York, New Jersey, Massachusetts or Rhode Island is a smart move?
No, just that if you move to Montana your chosen career better not include energy production. At least not till we clean the job destoyers out of DC.
Two of the largest oilfield services companies continued to make cuts in the second quarter due to the oil slump.
In April, Halliburton said it had cut approximately 9,000 jobs, or more than 10 percent of its global headcount, over the previous two quarters. At the time, Christian Garcia, senior vice president of finance, warned that more jobs could be cut in the second quarter.
Halliburton made the cuts, it said, "to help mitigate the current market conditions that we are experiencing. We anticipate that these collective actions will result in additional cost savings in the second half of 2015."
http://www.bizjournals.com/houston/news/2015/07/27/halliburton-baker-hug...
Where will all those STEM majors go off to? Houston job market for anyone but menial work (waiters, etc) or health care in taking a bloodbath, esp those petrol engineers and all the realted fields such as equipment suppliers, etc. I wonder how many of them voted for Barry?
Nah, just that other states suck too now.
LSU. Louisiana's best high school.
Depressing state. Everything always thinks New Orleans/Gulf Coast and ignores what a shit hole most of the rest of the state is including Shreveport and Baton Rouge.
As a former long time resident, I'd say the number one problem (that everyone there knows but won't say out loud) is demographics.
Southern LA is over 50% vibrant.
Any time you get numbers like that (think Detroit, Baltimore, Camden) you get a shithole.
Doesn't matter where you go in the US or the world.
Shithole people create shithole environments because that's where they're most comfortable. Violence, disorder, trash, sewage, and a sense of something that was once nice (built by non shithole people) being turned into a shithole.
Once I finally came to grips with that and let the last vestiges of the brainwashing flow out of my body, I got the fuck out of there for good.
GEAUX TIGERS! LSU '92 FUCK YEAH!
Mediocre article as it doesn't take into account consumption of said commodities. If consumption is greater than production, that state would benefit.
This of course does not include all of the service industry who will be out of work as a secondary result of mining layoffs. Just shale without any of the other bubbles would be a complete bloodbath on it's own. Lube up everybody.
I'll stick to farming water in Ca. Big $$$.
Wyoming will ALWAYS be fine. Why? Because we don't overspend our State or local budgets.
So even in a downturn of energy, there'll still be plenty of $$$ for everything we need. And, we have the lowest population of any state.
<sarc>Of course, winters here are always brutal, and there's no work anyway, SO STAY THE HELL OUT OF WYOMING (unless you're a tourist--then you're welcome to come here for a week).
BTW, if you're here for the wolves, please take one with you when you leave. </sarc>
Wait, isn't Dick "deficits-don't-matter" Cheney from Wyoming? Did he develop this brainstorm after leaving the state, or did you kick him out when he became a RINO?
Yeah, but is it OK to visit for longer than a week if you bring a lot of guns and ammo?
Sure, but I'll have to charge you a 15% use fee, which I'll gladly take out of your guns & ammo supply. Just be sure your ammo is M855 5.56x45mm green tips and/or NATO M80 7.62x51mm.
Wyoming ehh. Well it appears dumping Syrian refugees in Idaho is in the works. Kinda close to Wyoming.
You need a more creative catch and release program. Catch in Wyoming, release on the streets of Washington, D.C.
Standard Disclaimer: And popcorn for everyone else.
NOTE: I'm calling first dibs on the State of Wyoming after the Russian Federation nukes all the strategic States. I'm going to plant marijuana all throughout the State of Wyoming after I paint my new White House dayglow lime green to match my appropriated Harley Davidson Electroglide and my appropriated Nomad, gold, guns, gold bullion, and food.
This should be fun.
Be sure to include ZH members on your party invitation list. I'll bring a Grafix and a stash of Bic lighters.
Let's party.
"Wyoming will ALWAYS be fine. Why? Because we don't overspend our State or local budgets."
Absolute horsepucky. Wyoming government spends far too much money. Wyoming will be in big trouble when the gravy train of mineral royalties gets cut in half.
Watch out for talk of an income tax after the 2016 election - if that happens Jackson Hole becomes a ghost town and Casper and Cheyenne will look like Detroit.
1. Thanks for making my points for me. First off, Wyoming public schools are paid for by State Sections of land through the leasing of said land to oil and gas exploration/operations. So if the budget is X, we spend X. We don't overspend. So if the budget goes down, students won't get new iPADS or Lenovo's. So what.
2. Your first bullet point is senseless, since that's an easy one due to the very low population.
3. We spend the 3rd highest per student BECAUSE WE CAN (see point #1).
4. Wyoming has NO state income tax, so stop pretending that "every person in WY" will have to pay $600 for the CB renovation. The only tax comes at the expense (mostly) of tourists paying sales taxes.
Wyoming will never support a state income tax. Now, go back home, Mr. Commie, and cry about Wyoming not being a Progressive state. And leave Jackson Hole and go back to CA. Progressives are NOT welcome in WY.
I happen to live in Wyoming, you jerk. Gov. Matt Mead is a progressive. He loves Common Core. He vetoed the civil asset forfeiture reform bill. He appoints Democrats to many important positions, including Attorney General, State Board of Education, etc. He is specimen #1 for what's wrong with Wyoming. Wyoming voters believe they live in a fiscally well run state. They don't.
With regard to your points. #1 - most money for K-12 comes from property taxes, not state leased lands. #2 - more than 20% of all employees in the state are on the government payroll, only NM is higher. 3. We can afford to spend like drunken sailors now because we have the mineral royalties. That boat is sinking. 4. I suspect citizens would prefer a $600 check like Alaska does vs. a fancy building in Cheyenne.
And are you so sure about that last comment? The leaders in the legislature are talking about it behind closed doors as the solution to the problem created by the reality of mineral royalties crashing.
Alright now you two supposed Wyoming nuts. There are other places that the rest of the world ignores too but for different reasons. I know you guys don't do grain out there but do you guys like these at all?
If you really want a a classic truck, a grain hauler in good working order is what you need. You might have to fix on it some but you guys can do that too I would guess. I think those old trucks are fucking cool as hell if they are going down the road as the last of the FMCSA DOT exempt trucks. Agreed?
Um, actually, in the Big Horn Basin, we do plenty of grain. I'm not a farmer nor a rancher, but there's plenty of agriculture out here. From corn to sugar beets to alfalfa to wheat and barley, there's plenty of it being done out here. I don't recommend living near a sugar factory, however (they give me headaches)!
And there's plenty of old trucks hauling those sugar beets come October and November. However, I don't recommend driving on their ass when they hit a big bump in the road (you might get a beet through your windshield).
Well that sounds good to me Surveyor4Pres. Interesting screen name BTW. I don't meet too many of the map types here but I am one too. Hey, I grew up in outstate Wisconsin and live outstate Minnesota so guess how I really am. Just as I say. I bet I would get along with you Wyoming folks but I do not know you yet. There has been a lot of talk about "going out to the wilderness and living off the land and such for some years now but that ain't realistic either. I have not been to Wyoming. You sound like decent folks the both of you.
Well, I might show up one day and I will have guns and ammo but I will also have gold and silver plus vehicles. That would be an awful long ride with a grain hauler though. Some of the old ones though are just something special simply for the fact that they have been abused and neglected and yet STILL provide a service. Someone has to haul the grain.
Who will stop this one?
3 of the 4 Presidents on Mount Rushmore were Land Surveyors. There's a poster that says "3 Surveyors and a President".
So I figure, someday, when I have 1/2 Billion dollars, I'll run for President, too. I've held RPLS surveying licenses in two states. But I haven't surveyed for about 15 years. I work from home as a software engineer.
I'm already at my "bugout" location, as it were, here, close to the mountains. Today's high temps in the sixties, and the mountains will get some snow tonight (yes, in July).
Yesterday, I was out in my yard shooting at my 100 yard target with my 7.62x51mm Armalite AR-10 and my Windham Weaponry M4, just to stay in practice.
Like I said, there's plenty of Ag going on out here, and plenty of work for a grain hauler a few months per year, I think.
I like your style Surveyor4Pres. I used to think that way too but then a woman bacame involved, then children but only two. That makes life hard for me much less the weight of everything else. I will stay put here unless it really get's going one day and I need to get out there. We don't need to know any names either.
And for what it worth you guys got me thinking about Wyoming politics. That has never happened before. I recall this remarkable lady from some years ago in the region. It was interesting what she did. I tow no party lines.
We love all trucks here, including ones like this.
That is bigger than the Terragator I was liming with this spring. That is a cool truck. Looks expensive though. I have to salvage one of the old timers because I know my way around those older engines and they are cool as hell.
As for #1, I pay just $900 a year in property taxes. Not bad, huh? Again, #2 is a moot point b/c of the low population numbers. #3, we will always have mineral royalties. Some years more, some less. Spend accordingly.
Look, I'm a Constitutional Conservative, and I know what you mean about Gov Mead and the progressives in this state that call themselves Republicans (they're all RINO's, mostly). And I know that without a single vote in the State Legislature, former Governor Freudenthal pushed Common Core down our throats. Then they held a meeting telling us how great CC would be.
I've got two kids in school here. I'm fed up with the Progressive Leftist Commies in Jackson Hole and throughout our state that are trying to turn us into CA. Sorry if I took it out on you, but I think your facts are wrong about how the mineral rights $$$ (or lack thereof) will hurt the state economy. The $$$ from the assets will always be there.
I also know first hand, how the Republican Party in my county will stop at nothing to push their establishment cronies and politicians. I've seen first hand the outright CHEATING that took place at the county level, and the subsequent cheating by members of the board at the 2012 GOP Convention in Cheyenne. Both my wife and I were DELEGATES at the GOP convention in Cheyenne. And neither of us were for Mitt Romney. I saw one of the board members ILLEGALLY VOTE for Mitt Romney.
I swear by Almighty God that in Wyoming, we, the moral majority and Constitutional Conservative base in these hills, will see to it that our nation does not perish from this Earth, and neither will our principles or our values.
This says everthing you need to know about that douchebag Freudenthal.
"On April 2, 2008, Freudenthal endorsed Democrat Barack Obama of Illinois for the party's presidential nomination, having cited "Obama's style of leadership and openness to discussion."
Aww come on man. You need some light rail out there because it'll be great. Look at this accounting....what could possibly be wrong with that?
Rhode Island's official slogan "Come to Rhode Island , we got nothing"
They've got thugs in Providence that will stab you to death over a parking space though.
What's not to love about the Statist states? The Peoples' Demokratic Republiks of the East Coast are wonders to behold.
From far away.
Only American give a shit about America and you stupid yanks will soon work that out. America who cares
Many yanks don't give a shit about america because if they did they would be getting rid of the ZioNazis in Congress.
This is just about Texas. The populations of all the others combined is about 17 million. Texas significantly higher.
Very true. Most people do not realize the size of Texas until they come and visit. It is an economic powerhouse.
Note the have nothings are the paper pushers who keep fucking over those with real assets with market manipulation and unnecessary regulations. Fuck those thieves. No commodities for you.
Don't worry about Jersey. Our fate was sealed long before commodities tanked.
"Don't worry about Jersey."
Are you fucking kidding or what?
Not an effin' human being in the World gives a rat's ass about 'Jersey'.
What a shit pit. If I were you I would move.
That was the general theme of what I was writing. But I'll consider your advice.
moved from Monmouth County to Houston in 2007. During the last election while there, I was one of 23 in my district who voted Libertarian, out of 5989 citizens.
I hear ya.
gives a rat's ass about 'Jersey'
While I agree with what you say 100%....I can not help but wonder......do you even HAVE a rat's ass to give????? That saying has always cracked me up LOL...
I just had dinner out in Casper, WY and was the only table seated in the whole restaurant. Six months ago you waited to eat anywhere here.
Notice how dark ones are typically "red" states?
Well, thats likely because people work and pay taxes. You know produce real stuff so .gov useless eaters like politicans can have McMansions.
http://www.caliper.com/featured-maps/household-buying-power-maptitude-ma...
http://time.com/money/3014512/richest-wealthiest-highest-income-counties...
income by state
Double down on agriculture. You're going to need it.
New Jersey, Massachusetts, New York, Rhode Island and Connecticut have almost none of their economies in those industries, just 0.3 percent or less.
Yes, they are too busy engaging in the export of Liberalism, Socialism, Gay marriage, and other forms of perversion.....
WE need a wall. Around California and around those states mentioned in your post to keep their corruption out.
Build that wall!