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Yet Another Exponential Chart... And A Different Spin On "Keynesianism"

Tyler Durden's picture


In our daily scouring of the markets we run across a plethora of charts, many of them boring, some interesting, and a few select ones, exponential, and thus completely unsustainable. The US debt load is of course one of them, global central bank assets is another, as is pretty much everything associated with Europe these days. However, the following exponential chart is one we had never encountered before: it shows the number of major "disturbances", read power outages, in America's power grid in the last decade. The chart is, well, disturbing.

So with fiscal stimulus to fund social projects as one of the core tenets of neo-classical economics, or at least such being its interpretation in Washington, D.C., and New York Times newsroom of course, one wonders if perhaps this is not one of those occasions where it would make sense to incur the social cost to fund infrastructure developments upgrading America's dilapidated power system.

We would be merrily on our way with such blasphemous thoughts until we looked at another chart, this time one showing the "real victims" of power outages, where to our absolute lack of surprise, we find that by far the biggest beneficiary of an operating power system are US Brokerage operations, for whom every hour in power grid downtime results in a cost of a whopping $6.5 million.

Which then begs the question: since brokers, read High Frequency Traders, investment banks, and other operations that require copious amounts of electricity to run "arbitrage" and other "sensitive" information driven profitability schemes on a millisecond basis, are the ones benefitting the most from a well-greased power grid, should it be the onus of Joe Sixpack, in the form of yet more indebtedness, to fund a system whose benefits are so disproportionately skewed to the benefit of one specific class of consumers.

Perhaps it is the banks, who are so very reliant on an up to date electrical utility system, that should be the ones funding on a pro-rata basis in terms of benefits, or well over half, the modernization of such facilities. After all, following the mass bailout of all banks, these entities are already, pardon the pan, utilities themsleves... or at least would be if the bailouts had been executed properly, and any excess profits were solely to the benefit of those who provided the bailout cash in the first place: those who are now asked to fund infrastructure overhauls as well.

Naturally the same logic could be applied to all other aspects of the aging US infrastructure: perhaps instead of everyone paying for something which benefits abrnomally a select few, it is those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?

Just a thought.


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Thu, 04/19/2012 - 20:01 | 2359899 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Powerdown, bitchez

Thu, 04/19/2012 - 20:06 | 2359908 PersonalRespons...
PersonalResponsibility's picture

Reboot, bitchez

Thu, 04/19/2012 - 20:08 | 2359914 i-dog
i-dog's picture

Darkness, bitchezz!

Thu, 04/19/2012 - 20:17 | 2359932 Unprepared
Unprepared's picture

Electron, meet Exponent

Thu, 04/19/2012 - 20:55 | 2360009 AldousHuxley
AldousHuxley's picture

enron energy traders are still out there.


John Arnold, a former energy trader at Enron Corp.  who now heads up the Centaurus Energy hedge fund, not only made his inaugural appearance on the 2007 Forbes' list of the 400 richest Americans

Thu, 04/19/2012 - 21:02 | 2360020 Caviar Emptor
Caviar Emptor's picture

Enron was the Zen expression of the final chapter of the American Dream....

Thu, 04/19/2012 - 21:23 | 2360049 withnmeans
withnmeans's picture

Hmm, stands to reason "the last 10 year boom in power outages". Its been 11 years since I was in charge of a Public Power Electrical System, we had very few outages when I was in the biz.

Oh well, all good things must come to pass.

Thu, 04/19/2012 - 21:27 | 2360055 slewie the pi rat
slewie the pi rat's picture

Princess Scum

Cruise ship 'ignored Panama castaways'

Two of the three Panamanians on board the disabled vessel later died.

Fri, 04/20/2012 - 16:44 | 2362337 Likstane
Likstane's picture


Fri, 04/20/2012 - 01:00 | 2360364 boogerbently
boogerbently's picture


While we're all feeling impotent to induce any changes in the "rigged" system, all that's needed to inflict damage where damage is due is a "power outage"???

Let's "OCCUPY" some electric substations!

Fri, 04/20/2012 - 07:45 | 2360600 Element
Element's picture

The rise of the 'Smart'-Grid bitchez.

Thu, 04/19/2012 - 22:17 | 2360164 DaveyJones
DaveyJones's picture

that was deep

Fri, 04/20/2012 - 02:53 | 2360435 vast-dom
vast-dom's picture

Or HFT operations time their moves according to inside information on schedule of power outages such that they gain even greater advantage over select forced low volume more at no volume power outted sectors. There is certainly a way to invert the HFT trade with outtages.

Thu, 04/19/2012 - 20:10 | 2359916 spiral_eyes
spiral_eyes's picture

A military funded primarily by defense contractors...

Great idea, Tyler.

They can have all the military-Keynesianism they want... cause they're paying!

Thu, 04/19/2012 - 20:13 | 2359925 francis_sawyer
francis_sawyer's picture

How do SEC employees surf for porn if the power is down? This is a national crisis!

Thu, 04/19/2012 - 20:19 | 2359936 Unprepared
Unprepared's picture

The more disturbing question is, how people watched porn before electricity and motion picture?

Thu, 04/19/2012 - 20:42 | 2359984 StormShadow
StormShadow's picture

Well it was 3D porn of how we have regressed as a society, shame really

Thu, 04/19/2012 - 21:42 | 2360087 Bunga Bunga
Bunga Bunga's picture

They had real sex.

Fri, 04/20/2012 - 03:27 | 2360461 Genève Barbegazi
Genève Barbegazi's picture

with that piece of rabbit fur they call their girlfriend...

Thu, 04/19/2012 - 22:56 | 2360232 jeff montanye
jeff montanye's picture

words and imaginations.

Thu, 04/19/2012 - 22:19 | 2360165 Dr. Engali
Dr. Engali's picture

A more important question is how do we read the Hedge if the grid goes down.

Fri, 04/20/2012 - 00:00 | 2360304 wandstrasse
wandstrasse's picture

In Germany we hardly have any power outages - yet -, but first Bundesländer introduced the kill switch.. that is why I am collecting all important books, Griffin, Rothbard, Austrians, Orwell... they will not help me survive physically but maybe mentally.

Thu, 04/19/2012 - 20:16 | 2359931 philipat
philipat's picture

Wish it would happen a nanosecond after some HFT fucktard quote?

Thu, 04/19/2012 - 21:43 | 2360085 Eireann go Brach
Eireann go Brach's picture

Blame Apple products!

Thu, 04/19/2012 - 20:06 | 2359904 blunderdog
blunderdog's picture

   Naturally the same logic could be applied to all other aspects of the aging US infrastructure: perhaps instead of everyone paying for something which benefits abrnomally a select few, it is those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?

Um...that'd be socialism.

Thu, 04/19/2012 - 20:13 | 2359926 spiral_eyes
spiral_eyes's picture

No, that's personal responsibility. You gain from it, you pay for it.

Thu, 04/19/2012 - 22:13 | 2360150 Dr. Engali
Dr. Engali's picture

Socialism ? What the hell? Since when is it socialism to pay your own way?

Fri, 04/20/2012 - 04:12 | 2360485 MrRadiologist
MrRadiologist's picture

Drugs are bad.

Fri, 04/20/2012 - 20:32 | 2362835 TheFourthStooge-ing
TheFourthStooge-ing's picture

...mmm kay.


Fri, 04/20/2012 - 18:43 | 2362637 blunderdog
blunderdog's picture

It would be taxing businesses to pay for things that would also benefit individuals.

It was sarcasm, but I understand the confusion.  We have been told for decades that taxing businesses to pay for any shared-resource that benefits individuals is socialism. 

I was trying to play along.

Thu, 04/19/2012 - 20:06 | 2359907 tom a taxpayer
tom a taxpayer's picture

Wonder what the Power Outage chart for Japan will look like by the end of summer.

Thu, 04/19/2012 - 20:08 | 2359910 AchtungAffen
AchtungAffen's picture

They shot themselves on the foot... How ironic.

Thu, 04/19/2012 - 20:08 | 2359915 YesWeKahn
YesWeKahn's picture

The end of the world will happen this year 2012. Therefore I am not surprised.

Thu, 04/19/2012 - 20:11 | 2359918 francis_sawyer
francis_sawyer's picture

More wind farms & "Solyandra" ought to fix things... /sarc

Thu, 04/19/2012 - 20:11 | 2359921 Everybodys All ...
Everybodys All American's picture

I'm wondering what impact the auto industry has on the grid as well. I would think they would be huge users of electricity. Then one would have to ask what impact will all those prosposed electrical cars have on the grid. For some reason I'm thinking just like with the health care bill we won't know until it's been written in as law. What a bunch of Nancys.

Thu, 04/19/2012 - 20:11 | 2359923 rosiescenario
rosiescenario's picture

Another way to look at this is to ask, by how much are electric utilities' P&L's being overstated through their under performance of required maintenance?

Thu, 04/19/2012 - 20:14 | 2359928 Cruel Aid
Cruel Aid's picture

I'd get pissed, but this was a known known when the 780 billion tarp went into the banking abyss and a fraction of a percent made it to the shovel.

I remember the flow chart of tarp from Tyler, I think.

'We're fucked' is holding up so far.

Thu, 04/19/2012 - 20:13 | 2359929 chump666
chump666's picture

Obama and his Keynesian loons have funded Wall Street at the expense of...everyone.

And Joe Sixpack and Sally Cigarette get a nice gift...a high oil/pump price.

The seeds of dis-contempt have been sowed and will flourish in spring/summer. 

Thu, 04/19/2012 - 21:12 | 2360036 kridkrid
kridkrid's picture

And manifest how? I'll believe it when I see it.

Thu, 04/19/2012 - 23:06 | 2360249 chump666
chump666's picture

11th hr.

Always is, always will all fading empires. But the way the lunatics at the IMF/EU/ECB/Fed are handling things, a fade out might just be a black out, then chaos.  What i'd be watching in Europe is France, if they blow up first riots etc etc.  It will spread.  That french midget crying about the EURO mths ago saying it will always be strong blah blah blah, now is saying it's 'too strong'  Our leaders are losing control, they look sick and troubled.  Good.

Actually fun to watch. F*ck em all.

Thu, 04/19/2012 - 20:17 | 2359934 i-dog
i-dog's picture


"those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?"

User pays? Well ... that is the concept behind utility bills, where the cost of infrastructure maintenance is allegedly included in the tariff, is it not?

The real issue is: If utilities are overseen by the central planners, then why aren't the "regulators" ensuring adequate maintenance and performance?

Thu, 04/19/2012 - 20:21 | 2359942 nmewn
nmewn's picture

OMG!!!...don't ask questions!!!

They'll just tell you you're too stupid to understand ;-)

Thu, 04/19/2012 - 20:22 | 2359947 Cruel Aid
Cruel Aid's picture

They are overseeing the deactivation of coal plants. Somehow it is going well for them.

Fri, 04/20/2012 - 06:39 | 2360548 skipjack
skipjack's picture

So there really is someone on ZH who believes in the myth of effective regulators ?!?!?  Do you still believe in Santa Clause, too ?

Fri, 04/20/2012 - 07:04 | 2360559 Ghordius
Ghordius's picture

well, I do. If the regulation is smart and short instead of 20'000 pages laws nobody knows how to apply (we'll see then, folks).

The separation of business banking and investment "banking" of glass steagall (30 pages), it worked well for three (lucky) generations. Or the bans on all those derivatives that Clinton scrapped. Or several anti-trust laws that were reasonably well applied in the case of Bell Corp.

Smart & short keeps regulators transparent and honest. It did work, for a time, not perfectly but much better than now.

Thu, 04/19/2012 - 20:18 | 2359935 nmewn
nmewn's picture

Wait a minute...I thought all the "infrastructure" problems got fixed by doing Benny air drops to states for tenured professors & bureaucrats & men working signs...

Thu, 04/19/2012 - 20:38 | 2359976 Dr. Engali
Dr. Engali's picture

Shovel ready jobs weren't so shovel ready.

Barack H. Obummer.

Thu, 04/19/2012 - 20:45 | 2359988 Pure Evil
Pure Evil's picture

They were shovel ready allright, in fact the executive officers over at Solyndra were using bucket loaders to dumb thousands of dollars of filthy lucre into their gold plated dump trucks.

Thu, 04/19/2012 - 20:54 | 2359999 nmewn
nmewn's picture

Run Like Hell boys & girls...

Section 31406 of Senate Bill 1813 (known as MAP-21), calls for “Mandatory Event Data Recorders” to be installed in all new automobiles and legislates for civil penalties to be imposed against individuals for failing to do so.
“Not later than 180 days after the date of enactment of this Act, the Secretary shall revise part 563 of title 49, Code of Federal Regulations, to require, beginning with model year 2015, that new passenger motor vehicles sold in the United States be equipped with an event data recorder that meets the requirements under that part,” states the bill.

Thu, 04/19/2012 - 21:04 | 2360022 Caviar Emptor
Caviar Emptor's picture

Dunno about you, I want my "Events" in the car to be recorded for posterity! Else nobody would believe me...Ba-Da-Bo0m Ba-Da-BiNg!

Thu, 04/19/2012 - 22:30 | 2360184 DaveyJones
DaveyJones's picture

he begged them not to take him off the vice squad

Thu, 04/19/2012 - 21:06 | 2360025 Dr. Engali
Dr. Engali's picture

Hence the reason why I have bought my last new car. Any future car purchase will be a pre 1980 vehicle.

Thu, 04/19/2012 - 21:06 | 2360026 The Navigator
The Navigator's picture

Go long used cars

Our politicians have gone insane.

Thu, 04/19/2012 - 21:51 | 2360103 nmewn
nmewn's picture

Yes, go long used cars. These fuckers I swear guys.

This is exactly how they do it...some innocuous peice of bullshit tucked inside a larger package. No one stands up and says...ummm, wait a minute hoss...where's the sunset on this. Starts in 2015 and ends...when?

It doesn't? Really?!?!

And once this box is in place what other uses would it be good for after an upgrade? Tracking? Mileage taxes to go along with gas taxes perhaps? Isn't that double taxation? Why yes, it is.

And...ummm, by the way...individuals of the states are issued STATE drivers licenses & tags, not federal...douchebags.

More "commerce clause" crap trying to sneak in from the Federal Senate mates, beware.

Thu, 04/19/2012 - 21:48 | 2360098 MachoMan
MachoMan's picture

for the last many years there are black boxes in cars...  it's just that no one knows about it until there is a fatal crash...  (because the lawyers come knocking wanting the data).

Whenever you buy a new car, you sign a document that states you have been informed that one exists on your vehicle, etc.

Thu, 04/19/2012 - 21:54 | 2360109 nmewn
nmewn's picture

I have a 98 Chevy pick-up. I'll be keeping it.

Fri, 04/20/2012 - 01:13 | 2360371 Yen Cross
Yen Cross's picture

No worries! OBD2 and3 will be defeated! The government can't even manage its'self! It's all a FACADE!

 It's all smoke and mirrors. It's pretty hard to manage anything when your BANKRUPT!

 Cameras on every corner of every RUSTING BRIDGE!!

Sun, 04/22/2012 - 04:14 | 2364431 The Navigator
The Navigator's picture

Cameras on every corner of every RUSTING colllapsing BRIDGE!!

Isn't that what's happening now?????

Sun, 04/22/2012 - 04:20 | 2364430 The Navigator
The Navigator's picture

Good Jobs for the next decade or 2 - learn how to fix cars and PU trucks that have no computers or chips

Next best job - learn how to infect black boxes with stuxnet.

Heroic job - learn how to infect everything with stuxnet.

Try collecting your fucking taxes when you have to go door to door.

Thu, 04/19/2012 - 22:32 | 2360186 DaveyJones
DaveyJones's picture

those black boxes are always there full of interesting data, unless of course it's the biggest "criminal" attack in American history 

Thu, 04/19/2012 - 23:02 | 2360242 kridkrid
kridkrid's picture

Who needs a black box when you can locate a passport amongst the rubble.

Fri, 04/20/2012 - 10:04 | 2360954 MachoMan
MachoMan's picture

Yeah, it seems as though they serve two large purposes (now, anyway): (1) the collection of an incredible amount of data (even down to whether you were cranking up the volume on the radio near the time of the crash or even your preferences in music); and (2) the ability for auto manufacturers to absolve themselves from liability from product failure (the black box records a "warning light", e.g. for an airbag malfunction, and then they're off the hook when the airbag fails to deploy or, alternatively, how often you service the vehicle, etc.).

Fri, 04/20/2012 - 17:47 | 2362509 nmewn
nmewn's picture

Exactly...government voyeurism has reached epidemic proportions.

Somebody needs to alert the CDC, maybe they can tear themselves away from whatever they're watching ;-)

Thu, 04/19/2012 - 20:18 | 2359937 Pairadimes
Pairadimes's picture

The BLS would fix this by scheduling power transmission for alternate Tuesdays. Numbers would improve dramatically.

Thu, 04/19/2012 - 20:22 | 2359939 dwdollar
dwdollar's picture

This is really saying something considering the grid is suppose to be much "smarter" now than any time before.

Is the grid consumption too close to the maximum power output?

Is the infastructure getting too old?

Thu, 04/19/2012 - 20:20 | 2359940 Racer
Racer's picture

ZH you have outdone yourself....yet again

Fantastic.... keep it up for the sake of our grandchildren's children's children.........

Thu, 04/19/2012 - 20:21 | 2359941 Pure Evil
Pure Evil's picture

Might as well stick it to Joe Six Pack right out the block. If we get the banks and brokerage houses to finance the project they'll just pass along the costs in the form of new fees. And, then they'll expect us to pay them bonuses for their novel ideas on screwing over the little guy, and expect a pat on the back.

Thu, 04/19/2012 - 20:24 | 2359950 smb12321
smb12321's picture

And you would expect business entities to gladly fork out money for this out of the goodness of their heart?  One could ask, why don't we simply tax more for faster replacement since little by little the grid is being updated/replaced. 

Thu, 04/19/2012 - 20:36 | 2359972 Pure Evil
Pure Evil's picture

The authors supposition was that the bankers and brokerage houses should pay since they benefit the greatest from the grid.

I say, eliminate the middle man since we all know that final costs, as always, will be shouldered by the taxpayer.

So, why pay for increased fees and interest rates, so that Wall Street banks and brokerage houses can create new credit derivitives, sell these to unwitting Goldman Sach's customers, while pocketing bonuses and expecting the Federal Reserve to bail them out when the whole thing implodes into a ponzi singularity.

Fri, 04/20/2012 - 23:21 | 2363112 smb12321
smb12321's picture

True.  This whole business of massaging money in order to make more money - while not illegal - is unseemly and contributes little to the economy.   In fact, that stratosphere of government /corporate cronies has transformed economics into debt shuffling. 

Thu, 04/19/2012 - 20:20 | 2359945 reason_1
reason_1's picture

I'm sure all those coal-fired plants being shut down by the EPA to be replaced by those great solar powered plants that tend to go bankrupt have nothing to do with this.

Thu, 04/19/2012 - 20:22 | 2359946 smb12321
smb12321's picture

Thus reminds me of other chart in this vein - "extreme weather", "rampant disease", etc and all have similar causes.  Population expands therefore it encounters weather, disease and outages.  We build in places that were not meant for residential, putting a strain on resources and systems.  Our infrastructure is old (although being continually replaced) and due for breakdowns.   Primarily, though, folks are working desperately on a completely new approach - new energy sources, decentralization, replacing delapidated infrastructure - and we are on the verge of technological mega changes.

Thu, 04/19/2012 - 20:24 | 2359949 Dr. Engali
Dr. Engali's picture

Reason # 48 why I love Zero Hedge. Analysis you would never get any place else.

Thu, 04/19/2012 - 20:26 | 2359954 El
El's picture

That would be nice, but that would be asking people to carry their own weight. It doesn't work that way in a socialist society.

You know, I've never heard of the power being out in an investment bank or brokerage firm. Doesn't mean it doesn't happen, but I don't recall hearing about it. It seems to me that at least some of those firms would have a backup generator to kick in if the power went down. My last office shared space with MS, and our building had one.

Thu, 04/19/2012 - 20:27 | 2359957 Pinktip
Pinktip's picture

Wait for a CME or an EMP at the level of 1859 Carrington event, then reschuffle the data.

On a side note,  RIP Levon Helm



Thu, 04/19/2012 - 20:29 | 2359960 dwdollar
dwdollar's picture

The internet will likely be down if the power outage is regional.

Thu, 04/19/2012 - 20:28 | 2359955 astroloungers
astroloungers's picture

This make me think that an emp without the explosion and death might be the creative destruction/reset that is needed. No power,no data, no debt slavery.

Thu, 04/19/2012 - 21:10 | 2360031 The Navigator
The Navigator's picture


Thu, 04/19/2012 - 23:21 | 2360263 Prometheus418
Prometheus418's picture

I don't think that would work the way you might hope it would.  It'd hurt you far more than it would hurt them.

That being said, small tactical EMP would be a useful defensive weapon against drones- it can be accompished with a small jet rather than a shaped charge.  A guy could make an effective and reusable one in his garage- but I wouldn't advise testing it anywhere near other people- the wrong guy walking past with a pacemaker would likely land you in prison.

Thu, 04/19/2012 - 20:29 | 2359959 Miss Expectations
Miss Expectations's picture

Do they give a rat's ass?  No, they've got that underground bunker in Denver powered up, right?

Thu, 04/19/2012 - 20:33 | 2359967 hedgeless_horseman
hedgeless_horseman's picture


You think this outage chart is bad, you should look at China's.

Thu, 04/19/2012 - 20:36 | 2359973 Dr. Engali
Dr. Engali's picture

Oh good we aren't the stinkiest turd in the toilet bowl.

Fri, 04/20/2012 - 07:57 | 2360613 Element
Thu, 04/19/2012 - 20:34 | 2359970 Whatta
Whatta's picture

Another possibility...with the way that "bubble" developed so rapidly...the government is manufacturing the outages in order to sell us the doom and gloom and need for massive Keynesian spending under Tyrrant Obama's second term (or sooner).


If you squint your eyes it is kinda similar to - "they have WMD's so we must bomb them stupid (so HAL can prosper)"...this will be, "they hate our grid, we must spend trillions and create 75 jobs to upgrade our grid (so squids can prosper)"

Thu, 04/19/2012 - 20:39 | 2359975 reTARD
reTARD's picture

Can we blame chart 1 on natural disasters like we did when there were agricultural shortages?

Can we then say that chart 2 is why our economy has been slower than expected in recovery as well as the cause of our reduced tax receipts?

Otherwise, central planning and keynesianism is working well.

Thank God the power outages are never on Wall Street as we need them supercomputers to be functioning well when we need to do some naked shorting.

Thu, 04/19/2012 - 20:38 | 2359977 Jay
Jay's picture

I'm surprised that the brokerages would be hurt so badly by power outages. Our telecomm central office has battery and generator backup. Diesel is a little more expensive than PG&E grid power, but not much more. Have the brokerages no backup power?

We are only a major battery breakthrough away from electric cars in big numbers. Then we find out for real just how inadequate the grid is.

Thu, 04/19/2012 - 20:40 | 2359978 Cabreado
Cabreado's picture

"Maintenance" is an inconvenience...

"Infrastructure" is boring...

In fact,

"Sustaining a society" is a distraction altogether,

to the Self-Absorbed-as-Leader.


Thu, 04/19/2012 - 20:43 | 2359983 surf0766
surf0766's picture

This problem can be fixed. No more EBT cards.

Thu, 04/19/2012 - 20:45 | 2359987 hellas4life
hellas4life's picture

Genius. How do you propose they pay for it? A special utility tax on brokerage houses?

Thu, 04/19/2012 - 20:48 | 2359990 ekm
ekm's picture

Talking about energy.

Only 50 contracts traded since 6pm until 8.03. In 3 years following oil every single day, I've never seen this. It's usually about 800-1000 contracts by now.

Update: at 8.33 just One Contract.

Nobody is buying crude oil. Something is happening, something really is happening.

Thu, 04/19/2012 - 21:05 | 2360023 Stax Edwards
Stax Edwards's picture

Where is volume on that page?  Don't trade the stuff can you post another link?

Interested in what you have to share EKM

Thu, 04/19/2012 - 21:09 | 2360030 ekm
ekm's picture

I do not trade it either. I own HOD on TSX and follow oil quite, quite closely.

It may have something to do with the options expiry tomorrow, but even June's oil has too low volume. Still, never seen this before.

Thu, 04/19/2012 - 21:54 | 2360110 Stax Edwards
Stax Edwards's picture


Fri, 04/20/2012 - 03:20 | 2360453 chump666
chump666's picture

Well it's overbought relative to gold and USD bids.  It should get dumped with equities (correction).  But there is disconnect trades all over the place, looks like the market is overstretched (and confused) for more central planning intervention. The last gasp IMF begging will be disappointing, so markets will resume selling.

Oil doesn't look that unusual, decent correction will send it under 100

Fri, 04/20/2012 - 03:24 | 2360457 chump666
chump666's picture

But war will change all that.

Thu, 04/19/2012 - 21:11 | 2360034 Boston
Boston's picture

You're link is to May 12 (vs Jun)?

Thu, 04/19/2012 - 21:24 | 2360048 Errol
Errol's picture

Can't be an atack on Iran...Goldman Sucks would be frontrunning that like an olympian...

Thu, 04/19/2012 - 20:51 | 2360000 Dr. Engali
Dr. Engali's picture

I wonder how much electricity the NSA facility in Utah uses.

Thu, 04/19/2012 - 21:34 | 2360073 geekgrrl
geekgrrl's picture

According to this resource, "The $1.6 billion project will be constructed in three major phases, with the first and second phases costing $800 million each for two 35-megawatt data centers."

So, 70MW altogether.

I remember reading that the reason they chose Utah was because they were going to run the center off solar, but I can't seem to find the reference.

Fri, 04/20/2012 - 07:31 | 2360583 Real Estate Geek
Real Estate Geek's picture

" but I can't seem to find the reference."

The Ministry of Truth loves cloud computing, e-books, etc.!

Thu, 04/19/2012 - 20:52 | 2360007 bugs_
bugs_'s picture

power is supplied by the state

money is supplied by the state

perhaps a money outage is coming

Thu, 04/19/2012 - 20:54 | 2360010 NOTfromSanFrancisco
NOTfromSanFrancisco's picture



"...perhaps instead of everyone paying for something which benefits abrnomally a select few, it is those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?"

Amen to that...But then, may I be excused from paying school taxes if I have no children?...

Thu, 04/19/2012 - 21:02 | 2360011 Paul451
Paul451's picture

Smart Grid? How about OLD Grid?

Simple explanation: demand is up, capacity is flat, the grid doesnt get maintenance or replacement, and utilities are run by MBAs instead of engineers. The power industry was 'financialized' a long time ago. Stick a fork in it, it's done. Good luck trying to have a modern society when the frikkin' lights go out.

In the meantime, we're sitting on enough coal for the next 300 years and enough natural gas that we could tell OPEC, Venezuela, Russia, Mexico, and Canada to kiss our ass...but of corse we dont do that because our government thinks 'alternative energy' is the way to go.

If it werent so sad, it might actually be funny.

Thu, 04/19/2012 - 21:14 | 2360012 Caviar Emptor
Caviar Emptor's picture

Look, there's an obvious explanation: power outages are happening because so many Cool Cramerikans are enthusiastically trading stocks electronically with Hi-Freakwen_C (Registered Trademark) !! !! !!

Are we living in a Freakin' Utopia yet or whaat????

It's not HFT bots from Mars (don't be radicchio!) it's average well-adjusted Cramerikans (yes, with a small dose of the ole Cramerikan Exceptionalism!) trading over pancakes in the morning, burgers in the afternoon (made from the finest "pink, lean fine-ground beef", ya know)  and California Roll in the evening! (crab stick(R) made from slurried Pollock and FDA red dye #3 for that "plausible look") !

It's called Livin the Dream....!

(-Dream(R) is a registered trademark of the BernankeBuffet Corporation)

Thu, 04/19/2012 - 21:01 | 2360015 boiltherich
boiltherich's picture

Horseshit!  I live in a town of over 50k and our power goes out three times a week.  That would make Medford responsible for most of the outages in that graph all by itself unless they are seriously undercounting them.  And of course that is something of an exageration, but it did go out 4 times in one day two weeks ago.  Since 2005 I guess the power has been off here at least 40 times.  I no longer set any of the clocks on the stove, microwave, coffee maker, etc. I jut let them blink because if I do correct them it is the surest way to make the power blink off again.  So much for the smart grid.  It might be smart but it has the attention span of a goldfish.

Thu, 04/19/2012 - 21:11 | 2360033 yogibear
yogibear's picture

And Bernanke and Obama want to raise the bar higher next year. Print and create more debt. The Ponzi-thon continues until it can't.

Loss of failth in the US dollar at the end on Bernanke and the Fed's game.


Thu, 04/19/2012 - 23:49 | 2360294 engineertheeconomy
engineertheeconomy's picture

Ponzi-thon lol. Jerry Lewis for central banker 2012

Thu, 04/19/2012 - 21:26 | 2360056 adr
adr's picture

Hmmm the government paying for millions of welfare bitches power bills. All of them with government bought air conditioners, 50" Plasma TVs, XBOXs, and computers probably has something to do with it.

Not building any new power plants in years and taking hundreds of coal plants offline has something to do with it as well.

Millions of McMansions pulling an average of 1600kWh per month puts quite a strain on the grid. If we get over a week of 100 degree plus days in June the east coast grid is going down, maybe for good this time. It's been about ten years since the great blackout. Nothing was ever really fixed.

I had fun during the blackout. My apartment building had a backup generator for the whole building, since there was a restaurant on the first floor and the owner was sick of losing thousands of dollars every time there was a power outage. Living in the only buildin with power for 40 miles was pretty frickin cool.

Maybe we can blame facebook since everyone is on their computers 24/7 updating their status.Think of the power that takes.

Thu, 04/19/2012 - 21:47 | 2360094 Heroic Couplet
Heroic Couplet's picture

Now that Occupy Wall Street has a counterpart, Protect Wall Street, how many current finance sector problems can be traced directly to Phil Gramm, the repeal of Glass-Steagall, and the creation of derivative products? Anyone who got their ass handed to them on Phil Gramm's plate can take their complaint to Phil Gramm.

Then anyone who actually was dumb enough to think mortgage payments could reset to higher payments during the time US jobs were sent offshore can go hang themselves. Save the former middle class the trouble and the rope.

Thu, 04/19/2012 - 22:07 | 2360143 curly
curly's picture

Thank you HC.  Couldn't agree more.

Start with sleazeballs like WJ Clinton, Bobby Rubin, mix in retards like Phill Gramm, and what do you get?  we're living it.

And Tyler.  Stop being so mean on energy.  George W's posts say the world is ending, the Gulf of Mexi is dying, Prince Willi Sound is dead after the evil Exxon Valdez, and we're all going to grow 3rd heads, or something, from Fukushima radiation.  So we *have* to sacrifice.

But GW's enviro-weenie posts aren't real posts are they?  You're really just trying out an imitation of The Onion?  (MSNBC, NYTimes, Al Jazeera, etc. as credible, unbiased sources?)

Thu, 04/19/2012 - 22:33 | 2360126 virgilcaine
virgilcaine's picture

OT but Levon Helm passed today.. a great musician and a good man.

 His roots in country, blues and gospel can be seen  here which became Americana.. a genre of Music that he inspired and created.




Fri, 04/20/2012 - 00:06 | 2360313 samsara
samsara's picture

My first concert 1970 The Band

Rest in peace Levon.

Fri, 04/20/2012 - 00:28 | 2360337 Cynthia
Cynthia's picture

I thought I'd also pay tribute to Levon Helm by posting two of his most memorable performances of ”The Weight” and “The Night They Drove Old Dixie Down”:

Both performances were part of a documentary film about The Band's legendary concert entitled “The Last Waltz” which took place at Winterland Ballroom in San Francisco back in 1976. Levon Helm was one of the few drummers in the history of rock who could double as a lead singer. He was also one of the few rockers of his era that went on to become a well-known film actor.

Take a load off, Levon. RIP

Thu, 04/19/2012 - 22:01 | 2360131 alohasteve
alohasteve's picture

Today on Common Cents we are blogging about the 70th anniversary of the Doolittle Raid over Japan and the four surviving members who attended the reunion

Thu, 04/19/2012 - 22:23 | 2360175 geekgrrl
geekgrrl's picture

I've been expecting a sharp increase in power outages for a few years now, as per Duncan's Olduvai Gorge theory. Figure 4 in that paper shows that we have been on a slow slide downward, but he has 2012 as when the cliff starts. I think the actual outage data would seem to indicate the knee of the curve was in 2011, but it will probably take a few years before it becomes obvious. He estimates that by 2030, energy consumption per capita will be the same as it was in 1930, meaning we have a long way down to go.

It will be interesting to see how the nuclear power plants hold up when regional grids go down for extended periods.

Thu, 04/19/2012 - 22:34 | 2360190 jimmyjames
jimmyjames's picture

It will be interesting to see how the nuclear power plants hold up when regional grids go down for extended periods.


It will also be interesting to see when the lights stop shining-how long it will take to shift the mass anti nuclear mind 180 degrees to embracing it-

I'm long uranium miners-so maybe a bit biased-

Fri, 04/20/2012 - 00:55 | 2360358 TheMerryPrankster
TheMerryPrankster's picture

The irony of course being that a nuclear plant is one of the most sensitive locations for a power failure to occur.

Witness Fukushima, it wasn't the quake, or the tidal wave per se that destroyed the reactors. It was the failure of the diesel backup electricity generators that made the craptastic mess that is Fukushima today.

No power, no cooling, no control. If we do have more blackouts, its just a matter of time before we have more Fukushimas.

Mothers of radioactive babies will likely not embrace more nuclear power.

Tue, 06/12/2012 - 01:07 | 2517070 geekgrrl
geekgrrl's picture

Yes, that is the irony. I'm so glad someone picked that up. :-)

Fri, 04/20/2012 - 07:04 | 2360560 Cast Iron Skillet
Cast Iron Skillet's picture

I think they should mine all of the uranium & other radioactive substances out of the spent fuel ponds around the country until they're empty before they dig up new uranium.

Thu, 04/19/2012 - 23:22 | 2360267 samsara
samsara's picture

I've been watching this and waiting since I first read Duncan around 2002ish.  

Yes, Fig. #4  has got to be one of the most copied graphs in all Peak Oil-dom .  Matt Simmons even had it in some of his slide shows."gorge"

2012 was the year when the blackouts started according to the graph.  Amazing since Richard did that work in the late 90's




Thu, 04/19/2012 - 23:27 | 2360273 DaveyJones
DaveyJones's picture

thanks I had that same image in my head with this article but couldn't dredge it up

Thu, 04/19/2012 - 23:31 | 2360277 samsara
samsara's picture

GeekGrrl's link is the original and mine was the PDF version.

Fri, 04/20/2012 - 06:28 | 2360543 Dr. Engali
Dr. Engali's picture

That was a good article. Thanks for the link.

Thu, 04/19/2012 - 22:41 | 2360200 Dr. Sandi
Dr. Sandi's picture

I think it's fair to say that the guys with the most to lose in a power outrage will take precautions without prodding from big mother.

It's certainly a hell of a lot cheaper to equip all the buildings on the campus with aux generators than to chip in to repair the infrastructure.

Not only will it make the workplace a nicer place to be during a power outrage, but it's just another reason to not go home, where it's all dark and cold and nasty.

Thu, 04/19/2012 - 22:39 | 2360201 orez65
orez65's picture

The "rule of thumb" for electrical power grids in the US is to have 20% overcapacity.

This reserve provides standby electrical power for unscheduled breakdowns and for maintenance of power plants.

What's been happening is that a good part of the 20% overcapacity has been used to backup intermittent power from wind mills and solar power installations.

Therefore the 20% overcapacity can not provide enough power for unscheduled breakdowns and maintenance.

Look at the chart 1 and notice that the increased power outages coincide with the incorporation of wind and solar power into the US electrical grids.

Electricity from intermittent wind mills and solar installations for an on demand electrical power grid is another "liberal lunacy".

Fri, 04/20/2012 - 00:29 | 2360339 TheMerryPrankster
TheMerryPrankster's picture

I'm underwhelmed by your partisan analysis. Do you analyze everything through a lens bent by the suppositions of the only two possile political beleifs allowed by your "free" government and the "free press"?

Is your intellectual capital squandered in a false dichotomy meant to constrain your thoughts within a paradigm of failure?

First you must reducate yourself, then reducate others. The knowledge you were given was a trap, a cage to keep you from noticing the bars that surround you.

Thu, 04/19/2012 - 22:58 | 2360217 Yen Cross
Yen Cross's picture

 Speaking of exponential charts. Look @ the ( H-4) chart on £-¥ !  That parabolic 400 pip move, looks ripe for a squeeze (on the longs) during the Europe session!

 Friday risk off? Just before the G-7 Meat Puppets/ Muppets get together in fantasy land! Hell anything £ ? short looks good!

Rock on Tyler!

  Anyone have the / July options chart on [ GBP/AAPL ]  ?   /sarc

Thu, 04/19/2012 - 22:53 | 2360220 sitenine
sitenine's picture

When is the last time you heard of ANY brokerage firm going down due to lack of power?  Use your head.  Seriously, why would any brokerage firm want to pay to fix the crumbling infrastructure when they are all on UPS and diesel generator backups.  They don't give a shit if the electricity goes out for a few hours or even days.

Thu, 04/19/2012 - 22:52 | 2360221 UTICA CLUB XX PURE

I've spent my entire life "keeping the lights on" BH 


Thu, 04/19/2012 - 22:53 | 2360224 UTICA CLUB XX PURE

new sitenine: I agree!


Thu, 04/19/2012 - 22:53 | 2360225 mark mchugh
mark mchugh's picture

Someone predicted "Power outages like US citizens have never seen before" for 2011 in December 2010.


Thu, 04/19/2012 - 22:58 | 2360237 lead salad
lead salad's picture

So in other words....we're fucked.

Thu, 04/19/2012 - 23:02 | 2360239 q99x2
q99x2's picture

Hand Check

Thu, 04/19/2012 - 23:09 | 2360253 Yen Cross
Yen Cross's picture

 It's amazing how feeble we Humans are, ehh?  All the bring it forward " Good Will" this winter, suddenly becomes a run on " Nat Gas" this summer...  Coal doesn't work that great during the summer.

 Once again Tyler was right. Q-1 energysaving { front loaded}... Don't forget most manufacturing happens during the spring/summer months in the Northern Hemisphere. China is hating that one!

Thu, 04/19/2012 - 23:19 | 2360261 chump666
chump666's picture

Yen did you catch the Spanish 10yr trade flop?  So many bulls got caught with that wishing for yields to tank.  The sell off last session was not profit taking but a risk averse sell that could (could being maybe, maybe being f*ck sell this market) the start to the end April/May correction and the fabled 10% coming sell off.

Whats your thoughts.  Asia topped?  Korea blowing up?  Japan fiscal meltdown mid end yr?

Thu, 04/19/2012 - 23:35 | 2360283 Yen Cross
Yen Cross's picture

 I read Tylers article the night before. Spain has 42B of roll over the next 3-4 months. Christine La Guarde has been running around like the " Mad Hatter". Sarkozy is toast, Greece went AWAL on their schedule with TROIKA ect...

 I couldn't even begin to tell you what to do Chump. I'm keeping my trades technical and powerful at tops and bottom of S/T ranges.

 I'm going to short the hell out of GBP going into the W/E with the G-7 meetings. I figure we can get the 38.2 retrace on that gbp/jpy move from 127.09 to 131.17 before any rise continues. Same with all the crosses except aud/jpy. That is a choppy trade!

 Japan is talking weak yen because their MoF is in the U.S. this week. Japan is the bullshit master! Once again, I'm targeting that area just above 80 in usd/jpy.

  Hope you had a good week Chump. I'll be logged in and running charts.

Fri, 04/20/2012 - 00:58 | 2360359 chump666
chump666's picture

Yeah I am doing good. Just looking for the chaos/liquidation trade which I think is very close, i.e no new highs equities/commodities etc.  So i am looking at short top ranges (indexes), as everyone still wants to go long.  One guy, UK analyst, talked up the Spanish yield spike saying it was a good thing that the take up was covered by Spanish banks that borrowed from the ECB at 1% etc.  Then the market tanked!!! haha what an idiot.  It's a long market dying to unwind, which will be across the board.  USD is holding up, so that would be the arb trade sell everything, bid USD.  We will shall see.

I agree France is problem, IMF is f*cking clueless and should shut up, they ramped the market with the global growth bs story, rumor was to get Asian bonds bid so that Asia can throw a ton of cash into the IMF.  The coming bailout is Spain...obviously. That country has gone bust like 40times in the last 100 yrs or something.

Big unwind is up, when?  I dunno, but the dow fails 1000+ times (HFTs) breaks over

fingers crossed

Fri, 04/20/2012 - 02:26 | 2360389 Yen Cross
Yen Cross's picture

Draw a uptrend  and  down trend line on your favorite charts Chump!

 I suspect you will see the same thing I am. Decending wedges.?  Just place your bids and offers accordingly.

Don't expect much from earnings. Guidance was low. Compare YoY and MoM!

  I'm tired of these ass clowns Chump! I get back from Indonesia  and these little pricks are junking me on Z/H?

 WTF?  Tyler and Sacrilege should look into this.  These kids are Basement Babies!

  I just went diving and got to fly the clients plane. He want's my old 612 scagletti & my 575mm for a 458 spyder.

Is that a good trade?


Thu, 04/19/2012 - 23:27 | 2360274 samsara
samsara's picture

I read somewhere that many of the transformers in the country are about at their max age.  About 40 years in some cases.  Which would mean that we would just be starting the trend of failure in increasing numbers. 

We put so many of them out in the 60's and 70's that the aging fleet of power transformers and other equipment probably is starting to show it's age.

Thu, 04/19/2012 - 23:48 | 2360295 DaveyJones
DaveyJones's picture


Power Transformer Failure: The Background

Let's describe the origin of typical power transformer failure based on some USA statistics.

According to William Bartley from Hartford Steam Boiler - Inspection and Insurance Company - the overall load on power transformers has been increasing for several decades.

Significant industrial growth after the World War II caused a large increase in the number of transformers in electric utilities. Most of the power transformers from this era are now in or approaching the end-of-life stage of their life cycle.

Based on U.S. Commerce Department data, the power transformer installations reached a peak in the USA in 1974. That equipment is now over 30 years old. Capital spending on power transformer installations is now very low, which is why the average age of installed power transformers continues to rise.

Along with declining installations of power transformers, power consumption grows at a rate of 2% per year. A decrease in capital spending has led to an increased overall power transformer load.

Power transformers are expected to last 30 to 40 years. However in the 1975 study, it was found that the average age at the time of power transformer failure was 9.4 years.

In a 1985 study by Hartford Steam Boiler, the average age of a failed power transformer was 11.4 years.

Significant expenses on aging power transformer replacements justify the investment in power transformer monitoring and diagnostics.

Power Transformer Failure: The Moisture

According to William Bartley, the increase in moisture in power transformers can be caused by floods, leaky pipes, leaking roofs and water entering the tanks through leaking bushings or fittings.

Power Transformer Failure: Deterioration of Insulation

Insulation deterioration is another cause of failure over the past 10 years. The average age of the transformers that failed due to insulation deterioration was 17.8 years - a far cry from the expected life of 35 to 40 years! In 1983, the average age of failed power transformers was 20 years.



Thu, 04/19/2012 - 23:52 | 2360298 Yen Cross
Yen Cross's picture

That was a nice piece of info, Davey Jones!  Thanks for taking the time to put that together. +1

Fri, 04/20/2012 - 05:20 | 2360515 falak pema
falak pema's picture

The Reaganomics mantra was : "Henceforth in this NEW age, we move into the post industrial- high value added service-FIRE-supply side, winner-takes-all economy", from 1981 onwards. Smoke stack industry and power grid infrastructure were not SEXY anymore. It was more sexy to asset strip companies and junk their infrastructure components. Greed is good meant, "I want it NOW and I want it all and I want it fast". That set the investment mindset of 15% ROI of shareholder's equity and the quartely report syndrome. So who gives a rat's ass when private sector "optimises" investment along those lines to make decrepid : refineries, power grids and infrastructure in general. F*** that! No fast return on investment. Let it rot, we'll replace it when we have to...

Thirty years later, we are up to our shoulders submerged in debt mountain, both private and public in first world, not just in USA, and the infrastrucutre is so decrepid and the size of renewal required so awesome, one wonders why those who only prayed every day to the FIRE economy God, have had their heads up their asses for so long! But then Allah ho Akbar is a song that the Private Sector Oligarchy have loved to sing all along; only it was in the name of so called "free market" that was as free as a roman slave woman sacrificed on the alter of Mammom; "Mr ALMIGHTY Greenback" of the FED. 

Its nice to be a monday morning quarterback ! 

Fri, 04/20/2012 - 07:58 | 2360612 GMadScientist
GMadScientist's picture


Sun, 04/22/2012 - 04:38 | 2364438 The Navigator
The Navigator's picture

A little off topic - here are 10 mylar Emergency Mylar Thermal Blankets (Pack of 10) at Amazon for $8 and are 64 x 74 inches.

1- good for your BOB

2- for wrapping any EMP sensitive electronics (computers, walkie/talkies, BU generators, solar generators).

If you're prepping for electric outages with either invertor generators or solar generators, this $8 pack of 10 could ensure that your electronics make it to the other side (see/google farady cage on how to wrap electronics).

Disclosure - not my product, not my store - but wish is was.

Thu, 04/19/2012 - 23:33 | 2360282 mark mchugh
mark mchugh's picture

The last three paragraphs are tremendous, Tyler.

Thu, 04/19/2012 - 23:44 | 2360291 ebworthen
ebworthen's picture


Unfortunately, it is the mammon lusters who have caused the death of infrastructure.

Maintaining infrustructure requires investment, most importantly in people.

People are THE LAST investment the Kelptoligarchy wants to invest in.

Delay, decay, milking the old cow, feeding less and less, to hell with the animals on the farm and it's all about slaughtering the fatted calf and living for the moment; peasants and orphans be damned.

I have ZERO surprise that the electrical grid is collapsing; along with water, gas, sewage, roads, bridges, and everything else.

The collapse of Rome must have been eerily similar, but our aqueducts and roads won't last 200 years past our demise.

Fri, 04/20/2012 - 04:14 | 2360488 Zero Govt
Zero Govt's picture

Too true

as Govt gets bigger, everything around it deteriotes

as Laws, regulations and rules mushroom cloud it suffocates everything and everyone to a dumb-stupid grinding halt

We are reaching a peak in Govt and a peak in Laws/regulations ..we'll get an assured peak in socio-economic vandalism to go with it

Fri, 04/20/2012 - 00:03 | 2360309 kurt
kurt's picture

Does anyone remember the recent national grid modification having to do with regionalization and some crazy implementation of differing currents to prevent redundancy that we previously enjoyed with a national grid? Someone is gaming the system. What does EPRI say? Is this the warm up for the next ENRONesqe milkfest.

Fri, 04/20/2012 - 00:07 | 2360317 nonplused
nonplused's picture

You are worried about bank profits in the event of a major power outage????? Even amongst the wise, foolishness prevails.


Here is the real black swan, although it isn’t, yet, very likely.  But it’s possible.  And anything possible happens eventually.


When Fukushima lost power, how long was it until it melted down???  Some say it started melting down within 24 hours.  3 reactors melted down, blew up, and destroyed containment of both the reactor and the spent fuel storage pools.


Now, granted, they lost their diesel backup due to the tsunami.  I’ll give you that, total power loss at full reaction for 3 reactors.  That’s not likely here in a power outage situation.


Our diesel generators will run… so long as they have fuel.


But how long will they have fuel?  If the grid is down, the trucks that haul diesel can’t load, as the refineries and loading pumps are also down, and the trucks can’t get through traffic.  Until the grid is back, no new fuel for the backup generators.


Do they have enough fuel on site to go to cold shutdown and maintain it indefinitely?  No, they don’t.


They cannot even maintain what they call cold shutdown without either the grid or fresh diesel for long.  Reactors overheating and storage pools boiling off are all but certain without fresh diesel within a week or 2.


If there is a large power grid failure happens, and there have been 2 recently, and the grid is down for an extended period of time, there will be a Fukushima somewhere.  Maybe not as bad, but bad enough.


The “solar storm” some people talk about, if it did occur and did take down the grid for weeks, would kill us all as 400 nuclear reactors around the world ran out of diesel to fuel their backup systems, assuming those systems still worked.


I’m not totally opposed to nuclear, but we need a fail safe design that goes to cold shutdown on it’s own when it looses human intervention, like some propose Thorium-Sodium designs.  What we’re running now we have to shut down and clean up.


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