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According To Reuters, Soaring Energy Prices Are A Good Thing
When it comes to reporting the news, Reuters ability to get the scoop first may only be rivaled by its ability to "spin" analysis in a way that will make a normal thinking person's head spin. Such as the following piece of unrivaled headscrathing titled "The good news behind oil prices" whose conclusion, as some may have already guessed, is that "the surge in crude oil is looking more like a harbinger of better days." Let's go through the arguments.
From Reuters: The good news behind oil prices
- "the Iran-driven spike masks a broader underlying trend, and as long as military strikes are avoided, it appears to pose only a limited risk. In other words, there is a good news story."
Translation - Logic aside (namely that there is absolutely no connection between the precedent and antecedent sentences, but we'll let that slide) the fact that at least $140 billion has been removed from consumers' pockets YTD on an annualized basis (0.9% of GDP per $10 oil price increase), and has offset all the benefits from the payroll tax extension and then some, is not only irrelevant, but is apparently good news. Ignore that retail sales are abysmal for 3 months running, consumer spending has plunged and has already cost the US economy 0.3% in Q1 GDP, and all this happened even before the oil price surge, not to mention and European inflation is already above expectations on record Brent in Euros. All that matters is consumer confidence which is based on media "arguments" such as the one being deconstructed.
2. "Equity prices have risen in lockstep with oil's advance. When the two rise together, it usually indicates a broad-based economic expansion."
Translation - Reuters appears to have forgotten those long ago days of, oh, 2011, when equity prices and oil rose in lockstep too.
Then everything came crashing down. And no, it does not indicate a broad-based economic expansion, although first-year journalism grads are excused for thinking that (if not so-called 'strategists' from Deutsche Bank) - what it does indicate is an exponentially rising central bank balance sheet which is seeping into and inflating asset prices across the board, in the process sowing even more seeds of runaway inflation when the velocity of money finally picks up.
3. "The world's factories are churning out goods at a faster pace, a key indication of the economy's strength, meaning it is in better shape to handle a supply shock from Iran than a year ago."
Translation - ignore consistent sub-50 prints from Europe, a once again sliding Chinese economy, and a US Manufacturing ISM which was just barely above the lowest Wall Street expectation. Also ignore an abysmal Baltic Dry Index, and now sliding rail index. Just focus on the fact that the "world factories" are supposedly churning out goods at a faster pace, in some magical universe. Perhaps global channel stuffing, ala GM is considered an indication of the "economy's strength" - we are just a little more skeptical, and think it is a "key indication" that the economy is about to take the Chevy Volt out to pasture courtesy of a massive inventory glut.
4. "We think that crude oil prices have risen more because of improving sentiment regarding global growth than because of geopolitical risk concerns," Deutsche Bank told clients."
Translation - Speaking of Deutsche Bank, here is the "The Trinity of Bull." Nuf said.
5. "A sterner test will be whether consumers can absorb the higher costs at the gasoline pump, since their spending accounts for about two-thirds of all economic activity in developed economies. And that will depend upon wage gains."
Translation - There's myth. And then there is the truth is that in order to pad his reelection campaign, Obama has forced wage gains to be annihilated as proven yesterday, and even though the US economy has supposedly added 1.9 million people in the past 12 months, the aggregate tax withholdings - the most realistic indication of cash flow - are lower than a year ago, meaning that the low wage job additions have come at the expense of high wage losses. In other words: quantity of jobs up, quality of jobs way down. But how cares about details.
6. "A warm winter and a 30 percent plunge over the past three months in prices for natural gas, the fuel used to heat most American homes, have cut the average household energy bill. And more people have jobs today, providing more of a cushion to absorb costlier gasoline."
Translation - a warmer than average winter has done nothing but pull consumption forward. As Goldman showed on Friday, this one-time climatic aberration will now result in a drag on the economy, as warmed weather unfortunately did not help money to grow on trees any faster.
7. "The U.S. jobs report for February due out on Friday is expected to show 210,000 new jobs were added outside the farm sector, the third month in a row of gains above 200,000."
Translation - It is quite possible that adjusted, birth-death'ed jobs, pro forma of a labor force participation collapse will come in great. Or whether we will have another record surge in part-time workers? In fact if the LFP rate is under 58%, America will have a negative unemployment rate! The only question is just how many millions in "vapor" jobs will have to be added to the real number (2.9 million in January) to make the US economy appear to be growing on part-time fumes, 7 months ahead of the US breaching it debt ceiling again.
8. "Inflationary pressures would complicate the role of central banks, possibly quashing prospects for further monetary support for the recovery."
Translation - Wait, so recent journalism grads do know about the linkage between inflation and central bank balance sheets. But wait, why need monetary support? Isn't this whole article premised on the fact that the economy is in a sustainable recovery? Oh who cares...
But the best is Reuters uncontested conclusion: "But for now, rising oil prices largely are a growth story."
...
Sigh.
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the grand ol' Wurlitzer is hard at it
Journalism & the CIA: The Mighty Wurlitzer – Daniel Brandt
http://propagandapress.wordpress.com/2010/08/22/journalism-and-the-cia-the-mighty-wurlitzer-by-daniel-brandt/
Nobody wants to know the truth about oil prices or availability, all that the public wants are comforting lies, which the media and politicians are more than willing to provide.
- Here is some truth from stalwart Ambrose Evans-Pritchard: http://www.telegraph.co.uk/finance/commodities/9122311/Plateau-Oil-meets...
- Here is another Deutsche Bank report: http://www.ravennacapitalmanagement.com/mrr/wp-content/uploads/2012/02/D...
The world teeters @ the lip of recession and oil prices are climbing through the roof? WTF? They won't climb for long! The 2011 high was $128/bbl, let's see if the current mini-spike breaks through that level.
The longer the prices stay high the harder the demand destruction effects.
Because fuel subsidizes waste, better to have super-high prices to force conservation. The alternative to voluntary conservation is conservation rammed up the world's ass.
Start w/ USA gasoline @ $40/gallon and electricity @ $1/kwhr. See how much is wasted at those prices.
At those prices I could envision fat fucks in the burbs actually walking the 2 blocks to 7-11 to get their Slurpees.
There is no conservation.
Production has plateaued, id est the prospects of ramping consumption are gone.
And with them, total consumption.
Reuters:"Brainwashing Americans are getting too easy, except on the folks who read ZeroHedge. We should just purge these peasants and stop the noise."
BBC: New all time record for UK gasoline prices
http://www.bbc.co.uk/news/world-europe-17254544
But the US doesn't get oil from Iran, so how the fuck does that have anything to do with gas prices in Skokie? WHy did WTI spike $1.50/bbl two SUndays ago on no news at all? And how does that spike translate into a rise in prices THE VERY NEXT DAY? Do oil companies practice "just in time" gasoline delivery?
Any decent analysis shows Europeans actually pay LESS for the gas itself, it''s just (wait for the enormous surprise) the taxes on petrol are huge.
Because oil is fungible. When sanctions stop Europe from buying Iranian oil they have to find it elsewhere in the crowded market and the price goes up.
Puppet Bernanke should RIH
just heard a guy mentioning Zerohedge on Indian tv(ndtv profit). Man theses permabulls realy hate you guys around the world. Cheers!
Pshaw. The Japanese have been paying over $6 a gallon for ages, and look how well they're doing!
Rising prices ARE a growth story. Its just that they also happen to portend an inevitable collapse of growth, every single time!
Won't it be funny when global(ist) trade finally collapses and the US, with its hemispheric partners (smile Venezuela) turns out to be energy independent? Let China and Saudi negotiate their price, we don't need it. Current practice is simply oceans of money for the Koch brothers, Exxon, and all those global elites with which we, for some ungodly reason, continue to put up.
Fuck the world oil price. Let Eurasia burn itself out....again.
"Won't it be funny when global(ist) trade finally collapses and the US, with its hemispheric partners (smile Venezuela) turns out to be energy independent?"
Funny would be if people believed that there was some magic endless hole with oil in it within the Americas...
Same addiction, just a different supplier, and the SAME conclusion- oil culture on the rocks.
Funny, just one minute ago guy on radio noted that US has more oil than the Saudis.
Really?
I knew the Saudi's were hurting but I never knew that its was this bad...
After reading both, I found Tyler's commentary on the Reuters article to be much more informative than the article itself. Likely because unbiased facts are more informative than propaganda. It felt as if Stella Dawson and Leslie Adler were entitled to create a certain mood.
Wow, Zerohedge crushed it.
The Tylers really have got it together.
Yes they do. Zerohedge is like a really good T.V. series that builds on the previous episode. Some posts are downright depressing, but hey, you can't experience pleasure without ever experiencing pain. I can handle the truth now. Bring it on bithez.
and yet i have never seen so many corner gas stations go out of business as i have seen in the past 3 months
The Petrodollar Explained
http://www.youtube.com/watch?v=oUHmxBEZeU0&feature=related
...crude up 11% is good for the Suicide Vampire Squid of the Great Wal Mart of China. It buys the biggest gun and black hole ...in the head. http://www.bbc.co.uk/news/world-asia-china-17249476
http://www.youtube.com/watch?v=cbwwfNL4QUM
speaking of 11%...............
China's defense budget up 11.2% in 2012
China's defense budget for this year has increased by 11.2 percent to about 670 billion yuan, or 107 billion dollars.
National People's Congress spokesperson Li Zhaoxing spoke to reporters in Beijing on Sunday about the 2012 defense budget.
Li said the annual budget covers the cost of research, development, and procurement of all weapons, including new types of equipment.
http://www3.nhk.or.jp/daily/english/20120304_14.html
China adds to the mental confusion sweeping markets, but what is new...
* DJN China Should Try to Push Real Interest Rates into Positive Territory - Banking Regulator Official
* DJN China has Room to Further Cut Banks' Reserve Requirement Ratios - Banking Regulator Official
* China's Statistics Chief says Inflation Pressure Lower in 2012 vs 2011, Confident in 4% CPI Target
* China's Wen: Chinese Economy Faces Downward Pressures while Inflation remains High-Work Report
* China's Wen: To Take Steps to Curb Speculative Demand in Property Market
Crazy f*ckers...
all prices are higher save for housing which has been totally annihilated. wages are flat to down...is this really rocket science here?
http://www.youtube.com/watch?v=AvafMQireXg&feature=player_detailpage
Just a couple items: I live in upstate NY, and, even though the winter has been mild, it has not been conducive to bike riding. I will be cleaning up my two 12-speeds on Wednesday when it's predicted to be in the 50s (cheering!). Then they can raise the fu^@(^!ing gas prices to Fu?¶••ªº©?ing $60/gallon and tank the GD economy. Please! do it motherfuckers, because....
like my pal, Travie McCoy...
I want to be a billionaire so fucking bad...
http://www.youtube.com/watch?v=8aRor905cCw&feature=player_embedded#!
You gotta listen to this song. It says it all.
12-speeds aren't exactly the kind of bikes suitable for dealing with busted up roads and pot holes. Anyone who thinks that they'll be just fine when oil spikes (permanently) needs to reassess their understanding of how much oil is involved in their lives.
BTW - I commuted by bicycle for 5 straight years. Not bashing bicycles (even worked in a non-profit local bike shop), just wanting to help folks understand what's coming...
Great work Tyler. Everyday on Reiters or BBG one sees such crap that can be easily discredited. But one has neither the time nor the venue to do so.
Ahhh, but now we have a bunch of ZH'ers that can. Perhaps this can be a daily effort to crush those morons that just parrot what their editors tell them to.
If betting, one could profitably assume that these "authors" have no feckin' idea of what they are writing. They are the worst of the lot....
Let's expose them for the idjits that they are..!
Go forward!
What are the next headlines we can expect? Penis size does not matter? Excessive drugs helps one's competence? McDonald's is highly nutritious?
I have a strong stomach but this drivel almost made me puke......, yechhh
Enbridge shuts down oil pipeline for 4 days due to accident in illinois:
http://ca.finance.yahoo.com/news/enbridge-shuts-down-pipeline-cars-21125...
http://www.reuters.com/article/2012/03/05/enbridge-fire-idUSL2E8E41RV201...
The article fails to mention the exorbitant quarterly profits they make. In 2008, when barrels were going for $150 a barrel, and nearly $5/ gal, Chevron alone profited upwards of $16 bill/ quarter. And literally raping the American public. And now again, all the major oil refineries are essentially fixing prices and colluding on prices while doing so. How come nobody see's this as the major problem. Unrest in the middle east are oil companies wet dream. This "uncertainty" issue is an excuse to raise prices on the U.S population and everything will be negatively affected including food, airfare, and just about everything you can think of. But no politician will mention that because most of them are vested in the oil stocks and love it when oil goes up!!! This is what people should be upset about.. Either that or invest in oil stocks yourself. Every oil refinery stock has risen at least 30% within a 3 month period..
You should start an oil company and under cut them genius. BTW No oil company is raping anyone. Your hyperbole makes you look like a fool.
Oil companies are dealing with multi billion dollar investments of a deplting resource base. They have tenuous right to a certain amount of oil that will be extracted when there is a good chance the money supply will be ten times greater than it is today.
Of course they have to pull future profits forward in the face of this rapid monetary expansion and you should be happy they are. If they do not they will eventually go broke and have no money for exploration or extraction.
People like you are the problem. Mind your own business. The federal reserve is stealing from you everyday and you are railing about oil companies. You have obviously never made a profit in your life. You are a parasite sucking on the excess others have created for you. Leave the producers alone.
Surging oil prices are good for the balance sheets of Exxon's offshore fiduciary trusts. Everything is getting better. Fill er up. Hemp fuelz now.
CNBC took the story down.
I guess their internet editors read ZH!
They took the story down and replaced it with:
Rising Gas Prices Create Smoking Hot Demand for Used Cooking OilWho buys all their shitty screens?
my first job was as a research assistant at a premium energy publication, doing the numbers for big annual journals. when i tried to move into the daily editorial/reporting side, they said, "well you dont have any reporting experience. we can teach you the energy part easily, but the reporting part is what we're concerned about."
clearly they have the same respect for the "energy part" at reuters.
US citizenism has killed debates.
Debate is weak, debate requires the admittance of facts.
Denying facts kills debates, noted by Socrates, so a long time ago.
US citizens kick the can, they are addicted to that in any of their endeavour.
Very hard for a US citizen to take on Bernanke who is considered as the best specialist on this type of crisis by his US citizen peers.
The passion of the group that drives US citizens disqualifies de facto anyone who through observations of basic facts challenges Bernanke's point of view.
Due to another systemics, work division, Bernanke has also to know better and can not be outdone by mere basic facts collection. It cant be.
If Bernanke was not the man who is supposed to be, then he would not be in his position.
US citizens are revolutionaries, they are fond of circular logics.
The point to remember is that US citizens, as they kick the can, have troubles admitting the consequences of labour division.
For example, US citizen star Rick Santelli, came with the weird assumption that you can not con a honest man.
As for so many in the US citizen world, for Santelli, the loan crisis did not stem from the specialist side, it came from the non specialist side, a side that proved unable to spot that the specialists were erring.
Again, circular logics that shows the impossibility to endure the consequences of specialization, of labour division.
As president Bush said, you have to put food on family. A journalist has to do that, and in US citizenism, it leads to articles like the reported one.
You would have a much better chance at convincing people if you didn't went around making blanket statements about a group of people and attacking a strawman of your own making.
Also your dialectic is vacuous and and your arguments are shabilly joined together.
I expect better next time.
Made me laugh.
Convincing people of what?
Depiction does not have to be convincing. It has to be factual
It is another shallow attempt at shifting the focus on the other side.
Just a few days ago, the same US citizen behaviour popped about Paul's delivery.
If Paul's delivery was this or that, it could convince.
Save we are not talking about people who need to be convinced.
We are talking about people who know and are duplicitous.
Or like the WMDs story. If people had been convincing, they could have convinced people who thought there were WMDs that there was no WMDs actually.
Save that those people knew they were no WMDs and thus, it is a different story.
Really, there are some US citizens who want to sell the story that Bernanke is not aware of the side effects of his policies?
Bernanke knows and denies. Bernanke in a near future might even pen an article showing how his policies influenced inflation, (getting him money in the doing)
So convincing people of what? Please tell.
Entertain me.
+1 for getting a bit more clarity on your thoughts you post here and above - I'm still not sure what you are trying to say but it's at least more clear than usual
What am I saying?
That US citizenism ('americanism') is the core cause of the current state of the world.
Hard to get clear or simpler.
Go get a job at CNBC your writing will thrill them...
Soaring Energy Prices Are A Good Thing of course, for the enviroment, not for the economy or consumers...
Hey Ive got an idea... lets burn firewood instead of that expensive electricity to keep warm..
Now why didnt I think of that?
well done analysis!
http://www.jinrongbaike.com/
http://www.cnhedge.com/
Greek 1Yr now at 1000%!!
Higher oil prices helping the economy is almost as crazy as the myth that war helps the economy. When articles like this come out and when Geithner and Obama have all but accepted that higher gas prices are coming and that there's "no silver bullet" to keep them down, it seems to me like TPTB know it's inevitable that oil is about to rise very fast, very quick. My point is that normally, they're trying to pet us and ensure us that they'll be able to keep gas under control...but not this time.
TheSilverJournal.com
I think a few bottles of Ouzo and we can agree with the bankers on this. They have a superb track record on reading the cycle and they are clearly depositing cheap money from LTRO at the ECB just waiting for the European economy to fire on all cylinders sucking in Chinese imports. One of the greatest innovations in banking practice is the Crack Consensus and the Crystal Meth Circus in Eccentric Trading Circles. The use of Uppers and Downers reflects the cyclical nature of modern financial life and Main Street has learned to treasure the insight provided to Money Magicians by hallucinogenic drugs
Sorry, double post.
Buying Reuters was one of Rothschild's better investments. An asset that keeps producing. Producing carefully-modulated BS.
The headline should read: According to Reuters, the carbon tax is about to be implemented.
Since this is my first post here, I will leave this about myself as my bio was left blank. I have a pretty solid background in the energy sector and pretty much know where some of the bodies are buried. While some states are leaving the RGGI, http://newjersey.watchdog.org/2010/08/02/cap-trade-scheme-is-clouded-in-... I am seeing a renewed push behind closed doors that indicate a renewed push for a carbon tax, and it's the same players again. However, there has been more Solyndra like issues cropping up over the last few days and GE has canceled plans for a UK wind turbine factory (They also took stimulus money for offshore wind and then canceled their plans but kept the money). Australia has implemented a carbon tax and I have no doubt that this is still on the table here. Cncb did a story last year about high gas and food prices being a tipping point and folks we are there.
Killer Combo of High Gas, Food Prices at Tipping Pointhttp://www.cnbc.com/id/42704213
Mr. Krasting, I look forward to commenting whenever you do stories on Solyndra type issues and guarantee the subject of those stories will cringe.
TIMMBERRRR! (Crash)
I sincerely hope you were up in arms about Range Fuels....
The piece is political spin. Reuters is leftist. There is a lefty in the WH. High gas price hurts his re-election chances. So Reuters goon tries to convince readers that high gas prices are a positive. This annoying shit is why I gave up on newspapers.
And indeed, sheeple being sheeple, they believe anything the government tells them...
How convenient.
Sheeple is a fabrication.
US citizens usually are not sheeple. They are perfectly able to adopt the propaganda package that suits the best their interests.
US citizens know and in some cases, are ahead their government, when it comes to certain actions.
No government bill was needed to lead US citizens to patrol plantations to prevent slaves from running away, an activity performed at the expense of going to fight the war for freedom, justice, and truth, the US independence war is supposed to be.
They still make newspapers?
I have seen them in a rack at Starbucks. Is it decorative, only?
Reuters is based in London where gasoline is almos $10/gal., so given that they like high prices, what's not to like?
The real reason for the Rueters story is that there is a progressive Democrat in the White House. They are helping to make the case for a lame duck in the White House, with tyranny in his heart, this fall! They are trying to get His Unholy Unctuousness re-elected!
No, the RNC is trying to get Obama reelected. Lush Rimbaugh is the point of the rubber spear. The swift boat people are now paddle boat Admirals docked on the Rivera.
That wasn't a head-scratching article. It made my brain hurt.
from the article on CNBC: "Equity prices have risen in lockstep with oil's advance. When the two rise together, it usually indicates a broad-based economic expansion."
Huh? Where the fk did you get that idea from? Stop lying to me you bitch.