Patterico's Pontifications

6/26/2008

Dow Drops 358 Points

Filed under: General — Patterico @ 4:48 pm



It’s at its lowest point since September 2006.

The price of oil is continuing to rise.

Good times.

165 Responses to “Dow Drops 358 Points”

  1. Good thing those caribou don’t have to look at oil rigs in ANWR.

    SPQR (26be8b)

  2. Even with today’s percentage loss, I’m pretty sure that is close to what was handed to him, despite the 9/11 attacks, two wars in the Middle East and recently doubled gas prices.

    11,453.42 is what today’s DJIA close was, and close of trading on January 14, 2001 was at a (then) “all-time high” of 11,750.28, which dropped slightly in the days following, and even more severely (more than 1400 points) in the weeks following 9/11.

    Bush has since helped to rebuild the markets out of the dot-com bubble that had been handed to him, the 1,400+-point drop after 9/11, and THEN some, just in order to have a 3% drop equal what he started out with.

    Today’s drop might have been surprising, but it is neither discouraging nor unprecedented. We’ve seen much bigger drops followed by climbs that are just as larger, if not larger.

    Drumwaster (d67aaf)

  3. What do you expect? The economy was booming and someone decided to put the democrats in charge of congress. I dumped my investment since I knew the tax and spend was coming. Check the Oct 2006 numbers and gas prices, (dhimmi’s elected Nov 3) and the market and prices today. Act surprised like the dhimmi’s do. No drilling = no economy. Sue OPEC = higher oil prices or no oil. A 3 year old could make the honest decisions that need to be made so that leaves out the dhimmi controlled congress.

    Scrapiron (c36902)

  4. “Bush has since helped to rebuild the markets”

    And just how do come up with this?

    Is it the $4 trillion in deficits?

    The all time lows of the U.S. dollar?

    The $1 trillion dollar goodwill mission in Iraq?

    Or is it his energy policy that has oil trading at $140 a barrel?

    jharp (9b1a32)

  5. jharp – Do you believe the government can and should control the stock market?

    daleyrocks (d9ec17)

  6. jharp, blame Bush all you want for the costs of Iraq, but it is utter sophistry to try to tag him with the price of oil. If not for the knee-jerk response by Democrats and their fringe environmental overlords, we could have begun drilling in ANWAR and offshore seven years ago and we wouldn’t be so dependent upon foreign oil. This is one for which your side is going to have to accept blame.

    JVW (ce519b)

  7. “Or is it his energy policy that has oil trading at $140 a barrel?

    Great, jharp is going to add the oil industry to the list of things he is ignorant of, but still expresses an opinion.

    SPQR (26be8b)

  8. Or is it his energy policy that has oil trading at $140 a barrel?

    It’s the Bush energy policy that has all-time high demand from India and China and a ridiculous effective ban on increased domestic production? Who knew Bush was President in 1995, when drilling in ANWR was vetoed. Who knew Bush was directing the votes when drilling in ANWR was shot down in Congress a few years ago. Who knew Bush was the one opposing more domestic production today. Who knew these things?

    And just how do come up with this?

    The fact that the stock market has hit record highs time and again during his presidency and the country experienced a lower unemployment average than during the 1990s?

    Christ but if you’re going to be dumb try harder at it.

    chaos (9c54c6)

  9. And just how do come up with this?

    By actually looking at the facts. You should try it once in a while.

    Fact 1: The Dow was at the same level in January, 2001 as it is today (supra #2).

    That doesn’t include the dot-com bubble that was going on when Clinton was busy admitting to repeated felonious activity. It doesn’t include the 1,400+ point drop after 9/11. It doesn’t include the two wars being fought in the Middle East. It doesn’t include the doubled oil and gas prices that have cropped up in the past 18 months.

    Why? Because all of those negative influences on an economy have been factored in, and the economy is STILL growing.

    Facts. Learn ’em, know ’em, live ’em.

    Or is it his energy policy that has oil trading at $140 a barrel?

    No, “his” energy policies written into law by the GOP-controlled Congress kept the prices relatively stable for six years. The spikes only started in November, ’06, once the energy policies were no longer “his”, but instead belonged to San Fran Nan and Harry “Real Estate Mogul” Reid.

    How are those Democratic policies for lowering oil prices working out?

    Drumwaster (d67aaf)

  10. I’m full of hope that the Obamamessiah will quickly fix all these problems after he’s anointed elected.

    Old Coot (85f458)

  11. Hmm, strike-through of “anointed” didn’t take. Bummer.

    Old Coot (85f458)

  12. jharp wrote: Or is it his energy policy that has oil trading at $140 a barrel?

    Oh, yeah, jharp. It’s ALL Bush’s fault.

    Pelosi: ‘With Skyrocketing Gas Prices, Americans Can No Longer Afford Rubber Stamp Congress’

    Monday, April 24, 2006

    Contact: Brendan Daly/Jennifer Crider, 202-226-7616

    Washington, D.C. – House Democratic Leader Nancy Pelosi released the following statement today on President Bush’s, Speaker Hastert’s, and the Republican Congress’ empty rhetoric on gas prices. Key facts on the Majority’s failure to address gas prices follows Pelosi’s statement.

    With skyrocketing gas prices, it is clear that the American people can no longer afford the Republican Rubber Stamp Congress and its failure to stand up to Republican big oil and gas company cronies. Americans this week are paying $2.91 a gallon on average for regular gasoline – 33 cents higher than last month, and double the price than when President Bush first came to office.

    “With record gas prices, record CEO pay packages, and record oil company profits, Speaker Hastert and the Majority Congress continue to give the American people empty rhetoric rather than join Democrats who are working to lower gas prices now.

    “Democrats have a commonsense plan to help bring down skyrocketing gas prices by cracking down on price gouging, rolling back the billions of dollars in taxpayer subsidies, tax breaks and royalty relief given to big oil and gas companies, and increasing production of alternative fuels.”

    * * *

    Key Facts on the Majority’s Failure to Address Gas Prices:

    President Bush, Speaker Hastert and the Majority Congress wrote and passed a Republican energy bill that President Bush’s own Energy Department said would raise gas prices on American consumers. Big oil and gas companies wrote the Republican energy bill, and the American people paid the price.

    The Majority rejected imposing tough penalties on price gouging companies three times in the past year, since that time, gas prices increased by another 11 cents a gallon.

    Speaker Hastert and the Majority have been blocking action on Congressman Stupak’s Federal Response to Energy Emergencies Act (H.R. 3936) since last September, which would protect American consumers from high gas prices by empowering the FTC and the DOJ to investigate and prosecute oil companies engaged in price gouging at each stage of the energy production and distribution chain and outlaws market manipulation.

    Heckuva job, Nancy.

    BTW, FYI: I am a lifelong resident of San Francisco, and to my everlasting shame, Nancy Pelosi is “my” (shudder) Congressmember. Believe me when I tell you because I know: Even if George W. Bush was as brain-dead as moonbats believe he is, he’d still be TWICE as smart as Pelosi.

    L.N. Smithee (a0b21b)

  13. Check the Oct 2006 numbers and gas prices, (dhimmi’s elected Nov 3) and the market and prices today.

    We were paying $1.30 at the pump the year *after” the September 11 attacks. It reached $2.91 before backing off in April, 2006.

    Our elected leaders failed putting forth an energy plan adequate to the circumstances. All of them.

    If our ancestors has been this dumb, we wouldn’t be here.

    steve (620558)

  14. I especially liked when Bush and his GOP enablers offered special tax treatment to encourage buying gas guzzles.

    Anyone remember that? Old depreciation rules thrown out. Buy a gas hog, deduct the whole thing the first year.

    But no one could have imagined that it would increase our dependency on foreign oil.

    jharp (9b1a32)

  15. jharp – Do you believe the government can and should control the stock market?

    Should? Definitely not.

    Can? To a certain degree yes. Fiscal policy that weakens the dollar being a good example.

    jharp (9b1a32)

  16. The idea that changing the depreciation of a vehicle ( something done by a tiny percentage of tax payers ) would increase our dependance on foreign oil is the most pathetic argument I think I’ve seen from jharp.

    And given the nonsense in the Heller thread, that is quite an accomplishment.

    SPQR (26be8b)

  17. Bush and Pelosi EACH embraced rolling back the tax breaks for Big Oil as a means of lowering
    pump prices.

    By Chris Isidore, CNNMoney.com senior writer
    April 25, 2006

    But he did call on Congress to rollback $2 billion in tax breaks for oil companies over the next 10 years for items such as write-offs for some research and development for deep water drilling.

    “Record oil prices and large cash flows also mean that Congress has got to understand that these energy companies don’t need unnecessary tax breaks,” said Bush, a longtime tax-cut advocate. “Taxpayers don’t need to be paying for certain of these expenses on behalf of the energy companies.”

    steve (620558)

  18. I especially liked when Bush and his GOP enablers offered special tax treatment to encourage buying gas guzzles.

    Anyone remember that? Old depreciation rules thrown out. Buy a gas hog, deduct the whole thing the first year.

    But no one could have imagined that it would increase our dependency on foreign oil.

    Actually going and looking at the actual oil consumption numbers for the USA and the world the last five years would be wasted on you, so never mind.

    chaos (9c54c6)

  19. “The idea that changing the depreciation of a vehicle ( something done by a tiny percentage of tax payers ) would increase our dependance on foreign oil”

    Oh really?

    Do you know anything about business at all? Every single business depreciates every single vehicle they own.

    But I’m sure this is just a tiny percentage.

    jharp (9b1a32)

  20. January 2001 it took $.95 cents to buy one euro.

    Today it takes $1.55 to buy one euro.

    I was well aware Bush and company had fucked things up but didn’t really realize it was this bad.

    Any one of you brain surgeons want to take a stab at what this does to the price we pay for a barrel of oil?

    I’ll give you first shot it and ain’t holding my breath that I’ll get an answer even close.

    Heckuva job! W!

    jharp (9b1a32)

  21. jharp, at most, the exchange rate accounts for a fraction of the increase in the price of oil. The bulk of the increase is from increasing demand – much of it from China which actually subsidizes the cost of fuel to well below market price.

    As for the fall in the value of the dollar, you do realize the benefit we’ve seen in the trade balance of payments as a result has offset a large amount of the cost of importing oil, don’t you?

    No, I didn’t think you knew that, since it is obvious that macro economics is an area where you are as knowledgeable as you are in “bullets”.

    SPQR (26be8b)

  22. SPQR,

    “jharp, at most, the exchange rate accounts for a fraction of the increase in the price of oil.”

    So what you’re saying is though the dollar has lost almost 50% of its purchasing power in world markets it has had a fractional impact on the purchasing power of a barrel oil.

    Good one. Please put the bong away.

    jharp (9b1a32)

  23. Any one of you brain surgeons want to take a stab at what this does to the price we pay for a barrel of oil?

    I’ll give you first shot it and ain’t holding my breath that I’ll get an answer even close.

    So far I’ve got one ridiculous moronic answer.

    A fraction. From SPQR. Anyone care to try to top his stupidity?

    jharp (9b1a32)

  24. “January 2001 it took $.95 cents to buy one euro.

    Today it takes $1.55 to buy one euro.”

    “So what you’re saying is though the dollar has lost almost 50% of its purchasing power ”

    When you learn to do mathematics competently, then you can call me a moron. From the evidence that will be a decade or two in the future.

    SPQR (26be8b)

  25. Clinton/Greenspan’s folly was the dotcom bubble. Bush/Greenspan’s folly was the real estate/credit bubble – which is still not fully deflated. Expect many more interesting days like this until we hit bottom.

    Bradley J. Fikes (0ea407)

  26. SPQR,

    You tell me how much purchasing power the dollar has lost.

    It takes 63% more dollars to buy an equal amount of Euros than it did in 2001.

    But as you said this has a fractional impact on the price of a barrel of oil.

    Where’d you learn about economics anyway?

    ElRushbo? Fox News? Hannity?

    jharp (9b1a32)

  27. The article claims that:

    US stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression,

    which seems to be either inaccurate or terribly misleading. I can’t seem to find support for that in the article, nor by what measure this June was compared to previous ones, such as total loss, percentage loss, or some measure of how it affects the economy.

    That aside, I remember in the early ’90s when no one thought the Dow would ever top 8,000. (For those who are curious, you can use this nifty gadget to see the fluctuation in the Dow over time.

    bridget (add3eb)

  28. I don’t want anyone to hurt themselves trying to figure out the relationship between the weak dollar and oil prices so I’ll help.

    And a tip to SPQR, it’s better to remain silent and let folks think you are stupid than to post something that removes all doubt.

    Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore

    “Every commodity trader knows that all commodities trade off changes in the value of the greenback. When the value of the dollar falls, the nominal dollar prices of internationally traded commodities, like gold, rice, and oil, must increase because more dollars are required to purchase the same quantity of any commodity. Accordingly, a weak dollar should signal higher commodity prices. And it does.”

    “For example, if the greenback had held its January 2001 value against the euro, oil would have traded at about $76 a barrel in May 2008. This is almost $50 below the price that crude oil was trading at in May 2008. Accordingly, the decline of the dollar’s value accounted for a whopping 51% of the $97 a barrel increase in the price of oil from May 2003-2008.”

    jharp (9b1a32)

  29. jharp, if you took your own advice, it might be more useful.

    For instance, you just cited someone who confirmed what I said, that the exchange rate decline of the dollar accounted for a fraction of the increase.

    SPQR (26be8b)

  30. “For instance, you just cited someone who confirmed what I said, that the exchange rate decline of the dollar accounted for a fraction of the increase.”

    if the greenback had held its January 2001 value against the euro, oil would have traded at about $76 a barrel in May 2008. This is almost $50 below the price that crude oil was trading at in May 2008.

    So $50 out of $126 is a fraction?

    Accordingly, the decline of the dollar’s value accounted for a whopping 51% of the $97 a barrel increase in the price of oil from May 2003-2008

    And 51% is a fraction?

    And I suppose gasoline going from $2.40 to $4.00 is a fractional increase also.

    Where’d you go to school son?

    jharp (9b1a32)

  31. jharp, I went to a school that taught mathematics.

    You’ve now repeatedly demonstrated your ignorance of the subject. Its been quite hilarious.

    SPQR (26be8b)

  32. So $50 out of $126 is a fraction?

    Yes. 25/61, to be exact.

    And 51% is a fraction?

    No, that is technically referred to as a “percentage”, but that is simply a special kind of fraction, where the denominator is equal to exactly 100, by definition.

    And I suppose gasoline going from $2.40 to $4.00 is a fractional increase also.

    Yup. An increase of 2/3s, since you asked.

    Does it hurt to be that stupid?

    Drumwaster (d67aaf)

  33. Sorry, that first one should have been 25/63 (an irreducible fraction, since 25 and 63 have no factors in common).

    Drumwaster (d67aaf)

  34. ““For example, if the greenback had held its January 2001 value against the euro, oil would have traded at about $76 a barrel in May 2008. This is almost $50 below the price that crude oil was trading at in May 2008. Accordingly, the decline of the dollar’s value accounted for a whopping 51% of the $97 a barrel increase in the price of oil from May 2003-2008.””

    jharp – These are absolutely brilliant arguments. So perhaps if, ceteris paribas, the dollar tracked the euro, world demand had remained at 2001 levels and there was no uncertainty about supply situations in the Middle East, Nigeria or Venezuela, the price of oil would have remained the same. Since it hasn’t, I blame all of the increase in price on world demand and supply uncertainty. QED.

    So you think I can get a job at Johns Hopkins?

    daleyrocks (d9ec17)

  35. Drumwaster, evidently it does not hurt enough.

    SPQR (26be8b)

  36. SPQR’s original quote.

    “jharp, at most, the exchange rate accounts for a fraction of the increase in the price of oil.”

    And yes 51% is a fraction as is 99%.

    You could also say “the exchange rate accounts for most of the increase in the price of oil” and that would also be accurate.

    I think the latter is a much more descriptive statement.

    jharp (9b1a32)

  37. And just think, we can run up another $4 trillion in deficits and it’ll have a fractional impact on the value of the dollar.

    Or blow throw $10 trillion in 6 years and we can call it a fractional increase in the debt.

    jharp (9b1a32)

  38. daleyrocks,

    You don’t get it at all.

    “So perhaps if, ceteris paribas, the dollar tracked the euro, world demand had remained at 2001 levels and there was no uncertainty about supply situations in the Middle East, Nigeria or Venezuela, the price of oil would have remained the same.”

    If the value of the dollar had remained constant the price of a barrel of oil would be $76 as a result of the increase in demand. It was $126 per barrle the date of the publication. $50 of which is a result of the weak dollar.

    Please guys. Turn off Fox News, ElRushbo and learn a little something. You’re hurting America.

    jharp (9b1a32)

  39. bullion firmed up nice **grins**

    assistant devil's advocate (c03461)

  40. And just in case this helps you understand.

    Oil was about $30 a barrel in 2001.

    jharp (9b1a32)

  41. Oil was about $30 a barrel in 2001.

    And only $78 in October, 2006. In the last 18 months, it has almost doubled. Once more, what event happened in November of that year to cause gas and oil prices to spike so precipitously?

    Drumwaster (d67aaf)

  42. jharp – I understand the flawed analysis perfectly, thank you, which is why I gave my counter in return.

    I also mispelled it. It should have been paribus not paribas. Paribas are those frogs I worked for 25 years ago.

    daleyrocks (d9ec17)

  43. jharp – See, he could have picked, if he could have found one, a currency the dollar had appreciated relative to over the same period and come to the opposite conclusion – meaning the dollar was not responsible for any of the increase in the price of oil. You can create any argument you want with this type of analysis.

    daleyrocks (d9ec17)

  44. You worked for an unusual species of frog?

    Drumwaster (d67aaf)

  45. Big bank with a bunch of interests in the U.S.

    daleyrocks (d9ec17)

  46. daleyrocks,

    How about the Canadian dollar. From our biggest oil supplier. How we’d do against it.

    “Since January 2000, the dollar has fallen by 37 percent against the euro, with nearly two-thirds of that decline occurring since January 2006. The dollar has fallen 31 percent against the Canadian dollar, and 17 percent against the British pound.”

    Oh, I’m sorry that sucked too.

    Hopefully with the Canadian dollar you guys will get it through your dim witted skulls why a weak dollar causes higher oil prices for us.

    jharp (9b1a32)

  47. How about the Canadian dollar. From our biggest oil supplier. How we’d do against it.

    What about the currency of our second largest oil supplier – the Mexican peso?

    Drumwaster (d67aaf)

  48. “What about the currency of our second largest oil supplier – the Mexican peso?”

    Although recently stable, is among the few world currencies that hasn’t posted strong gains against the greenback. The slumping U.S. dollar is referenced against the euro, the pound or even the Aussie dollar, but rarely the peso.

    The peso has quietly marched up to a two-year high, having rallied to 10.5 pesos to the dollar last week from 11 pesos last fall.

    jharp (9b1a32)

  49. Do you know anything about business at all? Every single business depreciates every single vehicle they own.

    Actually, I know quite a bit about business, thanks. Accelerating the depreciation doesn’t encourage a company to buy a gas-guzzling vehicle. Rather, it encourages companies to replace old vehicles more often. Since vehicles are tending to get more fuel efficient every year, and newer vehicles tend to pollute less than older vehicles, this is a good thing on the margins.

    But it’s silly for a business to suddenly spend more on fuel just because its capital equipment is depreciated faster. Businesses that intentionally over-consume don’t stay in business very long.

    Steverino (b42fd7)

  50. jharp – Just try thinking about it this way for a minute – U.S. demand for foreign oil contributes to a weaker dollar.

    daleyrocks (d9ec17)

  51. Actually, I know quite a bit about business, thanks. Accelerating the depreciation doesn’t encourage a company to buy a gas-guzzling vehicle.

    Do the math. And please note the price of gas at the time the incentive was applicable.

    A 35,000 deduction in one year instead of five saves more than enough to pay for higher fuel consumption.

    jharp (9b1a32)

  52. jharp – Just try thinking about it this way for a minute – U.S. demand for foreign oil contributes to a weaker dollar.

    Yes it does.

    jharp (9b1a32)

  53. JHarp,

    Couldn’t you also say that, since gas costs $2/gallon in Mexico, the slumping dollar is not really the cause of the high gas prices?

    As a data point, in late 2003, the euro was worth $1.20. (I’m picking a time when I was ruckusing around Europe and utterly peeved that the dollar had gone down against the euro.) Gas was $25/barrel. Proportionally, then, if the euro is now worth $1.57, gas prices should be no more than $35/barrel.

    I suspect that you cited 2000 for your dollar/euro ratio, as that was shortly after the euro debuted on the open market. In fact, the euro didn’t even have physical currency until 2002. Its strength against the dollar was initially not a function of the power of American currency, but the weakness of the new European currency, which has very, very little to do with the price of oil on the world market and the ability of American consumers to purchase it.

    bridget (add3eb)

  54. SINGAPORE (AP) — Oil prices eased Friday after surging in the previous session to a record above $140 a barrel as the dollar’s slump prompted investors to flock to oil as a hedge against inflation.

    On Thursday, the dollar slipped against key currencies as U.S. data showed sluggish economic growth and pointed to a struggling labor market. Oil is priced in dollars, and some investors buy oil contracts to protect the value of their assets against accelerating inflation when the dollar falls

    jharp (9b1a32)

  55. “Couldn’t you also say that, since gas costs $2/gallon in Mexico, the slumping dollar is not really the cause of the high gas prices?”

    I guess you could say it but that doesn’t make it true. And it isn’t.

    “As a data point, in late 2003, the euro was worth $1.20.”

    Not sure what a data point is. I chose Jan of 01 because that is when GWB took office.

    “(I’m picking a time when I was ruckusing around Europe and utterly peeved that the dollar had gone down against the euro.)”

    I don’t think this is a sound reason to opt for the time to measure.

    “I suspect that you cited 2000 for your dollar/euro ratio, as that was shortly after the euro debuted on the open market.”

    No. I chose it because it is when GWB took office.

    “In fact, the euro didn’t even have physical currency until 2002.”

    “Its strength against the dollar was initially not a function of the power of American currency, but the weakness of the new European currency, which has very, very little to do with the price of oil on the world market and the ability of American consumers to purchase it.”

    Have you been smoking something? It’s strength is a result of it’s weakness?

    Please clarify.

    jharp (9b1a32)

  56. harpy wrote: …it’s better to remain silent and let folks think you are stupid than to post something that removes all doubt.

    I wholeheartedly agree, so I know you’ll appreciate this: In the thread on the Heller decision yesterday, this foul-mouthed total TOOL started insulting everyone who disagreed with him, and when someone suggested he must be angry about the decision because he was so outrageously hostile, he wrote this:

    I happen to be a gun owner. Lot’s of em. And lot’s of bullets too.

    Can you imagine that? As Bugs Bunny used to say, “Whatta Maroon!”

    L.N. Smithee (910937)

  57. According to this dude the economy will go much deeper in the tank soon enough and it is all based on baby boomer demographics. http://www.thegreatbustahead.com and it doesn’t matter who is POTUS or what the fed trys to do.

    Still, I’m sure urkel would appoint scotus in the mold of ginsberg/kennedy/souter/breyer. Wouldn’t hillary or lani guinier make lovely justices? I can’t vote for the lightworker because he’s 50% honky, an asshole marxist neophyte and an arrogant prick.

    madmax333 (ef78fa)

  58. harpy is Levi’s long lost cousin.

    JD (5f0e11)

  59. Our elected leaders failed putting forth an energy plan adequate to the circumstances. All of them.

    What makes you think government planning can possibly do any good?

    Michael Ejercito (a757fd)

  60. Clinton/Greenspan’s folly was the dotcom bubble. Bush/Greenspan’s folly was the real estate/credit bubble – which is still not fully deflated. Expect many more interesting days like this until we hit bottom.

    So when will the oil bubble deflate?

    Michael Ejercito (a757fd)

  61. jharp @52 – Now you’ve made a start. U.S. demand for foreign oil is not entirely a function of U.S. fiscal and monetary policy. I like to blame the obstructionist policies of the democrats in congress for blocking ways to expand domestic supply.

    daleyrocks (d9ec17)

  62. Do the math. And please note the price of gas at the time the incentive was applicable.

    I have done the math. You don’t seem to understand how businesses operate. A savings on one end does not mean a business will needlessly run up some other cost. A business that needlessly runs up its costs won’t stay in business long.

    You made the assertion that the accelerated depreciation encouraged businesses to buy gas-guzzling vehicles. Your only evidence is that businesses save a little on taxes. As I’ve said, a tax savings is not sufficient reason for a business to increase costs for without a purpose. Common sense should tell you this is true.

    Why don’t you show us all ONE business that replaced a fleet of high-mileage vehicles with gas guzzlers?

    Steverino (b42fd7)

  63. jharp – Next you should look at the relative returns available to investors in instrumenys denominated in dollars versus euros at the beginning of the period and over the period you are studying. A large part of the difference is likely due anticipated changes in value of currency. You can see those anticipated changes to the extent there is an active forward foreign exchange market. Paul Krugman made a name for himself before he turned loony studying this phenomenon I believe – it’s called the Interest Rate Equalization Theory. Monetary policy on both sides of course has an effect on both sides here, as do many other factors such as political risk.

    daleyrocks (d9ec17)

  64. Steverino – Sure – businesses love to spend whole dollars for the prospect of 35 cent tax savings when they don’t need new equipment. It makes perfect sense to me. It’s all about the real cash flow baybee.

    daleyrocks (d9ec17)

  65. And just in case this helps you understand.

    Oil was about $30 a barrel in 2001.

    Since then, worldwide demand has skyrocketed, while supply remained flat. This leaves us with two ways to play the blame game:

    1. Blame those politicians who tried but failed to enact policies that would have allowed the supply to increase to keep pace with demand.
    2. Blame the politicians who actively lobbied against these policies and succeeded in making sure tehy were never implemented.

    One idea makes sense; the other is sheer idiocy.

    Xrlq (b71926)

  66. Xrlq – I think that harpy, and Levi, have demonstrated their sheer idiocy quite nicely.

    JD (75f5c3)

  67. I’m a buy-and-hold dollar-cost-averager, so stock market declines don’t bother me. I just send in a check every month regardless. I’m still way way ahead.

    gp (72be5d)

  68. Have you been smoking something? It’s strength is a result of it’s weakness?

    There are two issues here: what you mean by “its” (the dollar or the euro) and what time period you are considering. Consider as well that terms like “strengthness” and “weakness” are relative, as the dollar and the euro are being compared to each other.

    When the Euro was first issued, right around the time that President Bush took office, it was “weak” against the dollar. That was not a function of the strength of the dollar, but of the weakness of newly-issued currency.

    The euro stabilised against the dollar within a few years. That was when the euro cost about $1.20, in late 2003.

    My reason for picking late 2003 was to point out how very arbitrary your calculations are. If you pick a different point in time, when the euro was stronger against the dollar but gasoline was still inexpensive, you will get totally different results for your calculation.

    If your theory that the rising price of oil is actually due to the falling dollar, I would not be able to select, almost at random, a point in time that refutes your hypothesis.

    bridget (add3eb)

  69. bridget – IOW, STARTING POINTS MEAN SOMETHING.

    Sorry to shout. I’m trying to get jharp to understand that I can pick three different measures and compare their relationships and two different points in time and arrive at a completely different conclusion than he did. It’s easy to make numbers say what you want them to, but the relationships between commoditities and exchange rates are more complicated and influenced by more factors than just looking at where they stand on two dates and assuming no change in two of the three variables and then attributing all of the actual change to weakness in one variable.

    That’s just typical weak liberal thinking.

    daleyrocks (d9ec17)

  70. You’ll never get all that on a bumper sticker, guys.

    Drumwaster (d67aaf)

  71. jharp, you make references to Fox News, Rush etc., but evidently you are watching too much Keith Olbermann.

    Certainly you show no ability to understand the concepts you purport to be arguing about.

    SPQR (26be8b)

  72. I could recommend some audio books (since it would be too much to expect a graduate of today’s educational system to be able to actually read*), such as Thomas Sowell’s “A Citizen’s Guide to the Economy”.

    * – The man who does not read has no advantage over the man who cannot read. — Mark Twain

    Drumwaster (d67aaf)

  73. * – The man who does not read has no advantage over the man who cannot read. — Mark Twain

    Hear that, Levi?

    JD (75f5c3)

  74. gp,

    “I’m a buy-and-hold dollar-cost-averager, so stock market declines don’t bother me.”

    If you’re buying declines should not only not bother you but should please you.

    The idea is to buy when it’s low, sell when it’s high.

    jharp (9b1a32)

  75. Good times for me.
    Buy yourself another Hummer…
    please

    just another reader (62cb96)

  76. “If your theory that the rising price of oil is actually due to the falling dollar”

    Yep, that is my position. It’s pretty simple. If a dollar is worth less, it takes more of them to buy a barrel of oil.

    “I would not be able to select… … a point in time that refutes your hypothesis.”

    ?. I agree but don’t think this is what you meant.

    jharp (9b1a32)

  77. “I have done the math.”

    Care to share it?

    “You don’t seem to understand how businesses operate. A savings on one end does not mean a business will needlessly run up some other cost.”

    The idea is for the decision to result in a net savings. You know, like saving 2 thousand in taxes that only costs 1 thousand in additional fuel costs.

    “A business that needlessly runs up its costs won’t stay in business long.”

    No shit.

    “You made the assertion that the accelerated depreciation encouraged businesses to buy gas-guzzling vehicles.”

    Yes and it did.

    “As I’ve said, a tax savings is not sufficient reason for a business to increase costs for without a purpose.”

    So saving $2,000 on taxes and increasing fuel costs by $1,000 is not a sufficient reason to buy a gas guzzler. I’m glad you don’t work for me.

    “Why don’t you show us all ONE business that replaced a fleet of high-mileage vehicles with gas guzzlers?”

    There are many, many buyers that are not fleets.

    And I specifically remember several many business associates buying the bigger vehicles just so they could depreciate them in the first year.

    jharp (9b1a32)

  78. if you didn’t buy gold, you’ll be left in the cold.

    assistant devil's advocate (0cb110)

  79. Any of you economic geniuses have any further idiocy to add about the weak dollar and oil prices.

    By JOHN WILEN, AP Business Writer

    NEW YORK – Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude’s stratospheric rise, will extend its decline and add to oil’s appeal.

    The latest record came as the dollar fell against the euro in afternoon trading, having traded roughly unchanged for much of the day.

    jharp (9b1a32)

  80. Any of you economic geniuses care to add more idiocy about the weak dollar and oil prices?

    By JOHN WILEN, AP Business Writer

    NEW YORK – Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude’s stratospheric rise, will extend its decline and add to oil’s appeal.

    The latest record came as the dollar fell against the euro in afternoon trading, having traded roughly unchanged for much of the day.

    jharp (9b1a32)

  81. jharp – Has the rise in the price of corn over the past few years been due to the weak dollar?

    daleyrocks (d9ec17)

  82. “Has the rise in the price of corn over the past few years been due to the weak dollar?”

    Yes, it has been a major contributing factor.

    jharp (9b1a32)

  83. daleyrox – You already knew the answer to that one. If we could just strengthen the value of the dollar in relation to the Euro, it will be puppies, kittens, and kites for everyone and gas will be $1.25 a gallon. Now, if we could just get India and China to quit needing oil too.

    JD (75f5c3)

  84. Ethanol subsidies have nothing to do with the price of corn. Nothing. No impact. None. Zero. Zip. Nada. It is all because of the devalued dollar.

    JD (75f5c3)

  85. “Yes, it has been a major contributing factor.”

    “It is all because of the devalued dollar.”

    You trying to be a wise guy or are you really that dense?

    And just in case you dimwits can’t see it, exporting corn with a weak dollar has some pluses to it.

    jharp (9b1a32)

  86. Isn’t it possible to disagree without being so fucking disagreeable? Where is aphrael when you need him?

    JD (75f5c3)

  87. “Yes, it has been a major contributing factor.”

    jharp – All of it, just like oil in your analysis?

    daleyrocks (d9ec17)

  88. “And just in case you dimwits can’t see it, exporting corn with a weak dollar has some pluses to it.”

    jharp – Right, when people want something denominated in dollars it should strengthen that currency.

    What am I missing here?

    daleyrocks (d9ec17)

  89. jharp, if you are trying to set a record for how long you can continue to make yourself look like a fool in a single thread, you have a ways to go to get out of second place. Sure, its a strong second place, but Levi’s got a lock on first that you’ll have to double the length of this thread to match.

    SPQR (26be8b)

  90. Don’t worry about the price of corn though, once that magic euro/$ exchange rate drops below 1.40, the export spigot is off, even if the price per bushel falls through the floor. Mark jharp’s words, because it’s all about the weak dollar.

    daleyrocks (d9ec17)

  91. SPQR – Everybody needs goals.

    daleyrocks (d9ec17)

  92. daleyrocks: Has the rise in the price of corn over the past few years been due to the weak dollar?

    jharp: Yes, it has been a major contributing factor.

    Can you possibly elucidate the other (that is to say, the MAJOR) contributing factors, or is the chip in your brain that makes you repeat “WEAK DOLLAR…WEAK DOLLAR…WEAK DOLLAR” programmed to kill you with a cerebral hemorrhage if you don’t follow the script?

    L.N. Smithee (a0b21b)

  93. daleyrocks, yes but I really think its a goal that he should put after learning fractions.

    SPQR (26be8b)

  94. Ethanol subsidization has no major influence on the price of corn. China and India’s demand has no major influence on oil pricing.

    WEAK DOLLAR WARFOROIL BUSHCO SURRENDER IN IRAQ!!!!!!

    JD (5f0e11)

  95. bridget – harpy will never concede the brain-poundingly obvious point that using the value of the Euro at its introduction is noy exactly a good or fair measuring stick.

    JD (5f0e11)

  96. Oh, BTW, bridget – what about non-engineers with first names that begin with J ?

    JD (5f0e11)

  97. “bridget – harpy will never concede the brain-poundingly obvious point that using the value of the Euro at its introduction is noy exactly a good or fair measuring stick.”

    “As a data point, in late 2003, the euro was worth $1.20. (I’m picking a time when I was ruckusing around Europe and utterly peeved that the dollar had gone down against the euro.)”

    I’m sorry I don’t recall anyone voicing that using the exchange at it’s introduction was not an accuarte measure.. I’m open to hear why this is a bad choice.

    bridget, on the other picked a date when she was traveling in Europe. I fail to see why this choice is better.

    jharp (9b1a32)

  98. “Ethanol subsidization has no major influence on the price of corn.”

    Yes it does. As does the weak dollar.

    jharp (9b1a32)

  99. “Yes, it has been a major contributing factor.”

    jharp – All of it, just like oil in your analysis?

    No. Of course not.

    And it does not account for all of it for oil either.

    “If the value of the dollar had remained constant the price of a barrel of oil would be $76 as a result of the increase in demand. It was $126 per barrle the date of the publication. $50 of which is a result of the weak dollar.”

    You guys are jokes.

    jharp (9b1a32)

  100. Mark jharp’s words, because it’s all about the weak dollar.

    “If the value of the dollar had remained constant the price of a barrel of oil would be $76 as a result of the increase in demand. It was $126 per barrle the date of the publication. $50 of which is a result of the weak dollar.”

    Please do.

    jharp (9b1a32)

  101. “Can you possibly elucidate the other (that is to say, the MAJOR) contributing factors, or is the chip in your brain that makes you repeat “WEAK DOLLAR…WEAK DOLLAR…WEAK DOLLAR” programmed to kill you with a cerebral hemorrhage if you don’t follow the script?”

    Why don’t you tell me what contributes more. Kind of like I did with oil.

    I agree that both the weak dollar and ethanol subsidies are major contributing factors.

    Which is greater I don’t know.

    jharp (9b1a32)

  102. harpy – bridget kindly pointed out to you that the date you chose as the starting point to value the Euro coincidentally coincided with its introduction to the market, at a time when it would be inevitable that it would be weak.

    watch out, guys. harpy knows things. One minor variable and he can predict commodity values. He must have been advising Hillary when she nailed the futures market.

    JD (5f0e11)

  103. “If the value of the dollar had remained constant the price of a barrel of oil would be $76 as a result of the increase in demand. It was $126 per barrle the date of the publication. $50 of which is a result of the weak dollar.”

    jharp – It’s nice to know you believe there are only two factors involved in the establishment of international oil prices.

    daleyrocks (d9ec17)

  104. Let me modify that prior comment slightly:

    jharp – It’s nice to know you believe there are only two factors involved in the establishment of international oil prices, perfect control over which resides nearly in the perfidious hands of dastardly Chimpy McKatrinaburton, the bastard!

    daleyrocks (d9ec17)

  105. neatly not nearly

    daleyrocks (d9ec17)

  106. JD – Notice how jtroll took your sarcastic comment out of context, and made it seem as if he was correcting your wrong assertion?

    Wait a minute — he would have actually had to perceive your sarcasm before trying to turn it around on you. I am not sure he can do that.

    [Emily Litella mode]: Never mind.

    L.N. Smithee (0931d2)

  107. “the Euro coincidentally coincided with its introduction to the market, at a time when it would be inevitable that it would be weak.”

    Can’t wait to hear this one.

    And why would it inevitably be weak?

    jharp (9b1a32)

  108. See what happens jharp when you don’t learn your fractions? tsk tsk tsk.

    SPQR (26be8b)

  109. “jharp – It’s nice to know you believe there are only two factors involved in the establishment of international oil prices”

    Who said there are only two factors involved?

    You are a joke and your arguments are absurd.

    jharp (9b1a32)

  110. Because its relative value as a currency (which involves such things as consumer confidence, which can’t be measured with polls) had not yet been established.

    (You said you had studied this stuff… Apparently not.)

    Drumwaster (d67aaf)

  111. You know, jharp, your continual refrain does not substitute for your own utter lack of argument – or for that matter coherence.

    SPQR (26be8b)

  112. “You are a joke and your arguments are absurd.”

    jharp – My purpose in life is to amuse you. How am I doing?

    daleyrocks (d9ec17)

  113. “Because its relative value as a currency (which involves such things as consumer confidence, which can’t be measured with polls) had not yet been established.”

    You don’t know your ass from first base.

    I’ve got news for you. There is more than one currency to measure against the dollar.

    And they are kicking the dollars ass. And they are not kicking the euros ass.

    How do explain that?

    You really are a buffoon. Do you really believe they just print up some money and hope consumers will accept it. Do you understand that billions of dollars of trade occur instantly based on the exchange? Do ya think a capitalist system would immediately recognize an under or overvalued currency with billions at stake?

    Or do you think we should use bridgets guidelines and pick the date to measure when she chose to visit europe.

    jharp (9b1a32)

  114. jharp – My purpose in life is to amuse you. How am I doing?

    Not good.

    You seem either dishonest or stupid. Stupid I can take. Dishonesty I loathe.

    jharp (9b1a32)

  115. Stupid I can take.

    Not only have you taken it, you have clearly ODed on it.

    Drumwaster (d67aaf)

  116. daleyrocks wrote: jharp – It’s nice to know you believe there are only two factors involved in the establishment of international oil prices, perfect control over which resides nearly in the perfidious hands of dastardly Chimpy McKatrinaburton, the bastard!

    BDS sufferers are determined to seethe about the right to the point of denying what they know to be true.

    I have an old friend who was in the real estate industry, and when the subject of oil prices came up, I said I was relieved to be talking with someone who understood the concept of supply and demand, and its impact on prices. She started up with the “greedy oil company” schtuff, and out of respect, I let her finish. Then I said, “But you understand supply and demand as someone who made her living in real estate, right?” She stammered, paused, and went right back into her rant, as if she hadn’t heard me say anything. She couldn’t bear to admit that increasing supply would (eventually) reduce prices, and that the evil oil execs (and Bush & Cheney) could have a point.

    I was really disappointed, because she’s not a dummy. But apparently that rush of gettin’ your Bush Hate on is irresistible.

    L.N. Smithee (0931d2)

  117. L.N. – I think jharp needs a mirror.

    daleyrocks (d9ec17)

  118. jharp: Stupid I can take. Dishonesty I loathe.

    I guess the key to your oversatisfaction with yourself is that you’re too stupid to recognize your own dishonesty.

    L.N. Smithee (0931d2)

  119. “I have an old friend who was in the real estate industry, and when the subject of oil prices came up, I said I was relieved to be talking with someone who understood the concept of supply and demand, and its impact on prices.”

    Interesting that you think your friend understands when you obviously don’t.

    Do you understand the concept of a monopoly?

    An oligopoly?

    It’d be nice if it was as simple as you believe it to be in your simple mind.

    But it ain’t.

    jharp (9b1a32)

  120. Now you’ve abandoned the exchange rate, jharp, and are going to a new explanation you plainly don’t understand — monopoly.

    Brilliant.

    SPQR (26be8b)

  121. Do you understand the concept of a monopoly?

    An oligopoly?

    Lewt’s pretend that YOU do for a moment (pardon me while I still the guffaws), and ask you the best way to destroy a monopoly or oligopoly (or cartel, for that matter).

    Take your time. I’ll wait.

    Drumwaster (d67aaf)

  122. jharp babbled: Do you understand the concept of a monopoly?

    An oligopoly?

    It’d be nice if it was as simple as you believe it to be in your simple mind.

    But it ain’t.

    So…(playing along)…which are we discussing, harpy? Mono- or Oligo-?

    L.N. Smithee (0931d2)

  123. The idea is for the decision to result in a net savings. You know, like saving 2 thousand in taxes that only costs 1 thousand in additional fuel costs.

    You’re still not getting it. A company that has accelerated the depreciation on its vehicles and can replace them won’t replace them with bigger vehicles that cost more to operate unless there is a need that isn’t filled with new versions of the existing vehicles. It doesn’t make any sense to do that when the vehicles can be replaced with identical models and keep the operating costs at the same level.

    A tax break on depreciation is not in and of itself an incentive to increase costs needlessly. Yes, you could save $2,000 in taxes to get $1,000 in extra fuel costs. But it would make more sense to save $2,000 in taxes to get NO extra fuel costs.

    Am I getting through to you? Do you understand that it makes no economic sense for a company to get bigger vehicles than it needs?

    There are many, many buyers that are not fleets.

    Okay, show me ONE company that replaced 2 or 3 economic cars with gas guzzlers they didn’t need because of the accelerated depreciation.

    And I specifically remember several many business associates buying the bigger vehicles just so they could depreciate them in the first year.

    And if these business associates didn’t need the increased capacity in the vehicles, they’re idiots for not buying smaller cars. If they needed the larger capacity, then they would have eventually gotten larger vehicles no matter what happened to the depreciation schedule.

    Steverino (b42fd7)

  124. steverino,

    I am aware of several companies that bought the bigger vehicles just for the accelerated depreciation.

    And no, they didn’t go from Chevettes to Hummers. They just upped the size a little in order to qualify.

    It was a dumb policy. And Bush and the congress should have know it was a dumb policy.

    That’s it.

    jharp (9b1a32)

  125. I’ve got news for you. There is more than one currency to measure against the dollar.

    And they are kicking the dollars ass. And they are not kicking the euros ass.

    How do explain that?

    Drum,

    I’ll not get into the ology subjcet with you. The only point I was trying to make is the supply and demand argument does not come close to describing the complexity of the situation.

    I gotta go but why don’t you take stab at answering my above question.

    jharp (9b1a32)

  126. BS, jharp. Pure BS. You are making it up.

    SPQR (26be8b)

  127. I’ll not get into the ology subjcet with you.

    Dodging uncomfortable questions while demanding answers to your own?

    Uh, huh.

    Try again.

    Drumwaster (d67aaf)

  128. The only point I was trying to make is the supply and demand argument does not come close to describing the complexity of the situation.

    Ooooo! There are things going on here we cannot hope to begin to comprehend!

    Paul (0ea0cf)

  129. Paul,

    It is Petroleum Poltergeist!

    SPQR (26be8b)

  130. The only point I was trying to make is the supply and demand argument does not come close to describing the complexity of the situation.

    Whoever is keeping track, please add “Supply and Demand” to the list of things about which harpie knows absolutely nothing.

    Drumwaster (d67aaf)

  131. One thing that I’m finding amusing is that the recent spikes in oil and gasoline prices are a small example of the full range of interventions that AGW proponents are claiming we must engage in. And yet the very same people who claim that AGW is a crisis are claiming that these price increases ( which are resulting in only a small amount of reduction in fossil fuel use compared to what the AGW proponents are demanding ) are an even larger economic crisis.

    SPQR (26be8b)

  132. JHarp,

    My point was that you could use a randomly-selected point in time to compare the value of the dollar to the value of the euro, and then do a “calculation” as to the increase in the price of gas that is attributable to the weakening dollar.

    I picked as random a point as I could and determined that, by your logic, a barrel of oil should cost less than $35.

    If you would like, I’ll make a spreadsheet of the value of the dollar, the value of the euro, and the cost of a barrel of oil (in U.S. dollars) over the past seven years, and then determine, for each point in time, what a barrel of oil ought to cost now, based on the exchange rate as of 27 July 2008.

    The result will vary so widely with time as to be meaningless.

    bridget (e8e4c8)

  133. Bridget – Given that the harpster doesn’t understand the flaws in the Johns Hopkins analysis that was presented earlier and seems unwilling to listen, harpy has entered Levi territory in my book.

    daleyrocks (d9ec17)

  134. Only if he becomes caustic and resorts to cursing.

    Paul (0ea0cf)

  135. Paul, you can check those boxes already.

    SPQR (26be8b)

  136. “If you would like, I’ll make a spreadsheet of the value of the dollar, the value of the euro, and the cost of a barrel of oil (in U.S. dollars) over the past seven years, and then determine, for each point in time, what a barrel of oil ought to cost now, based on the exchange rate”

    That is a kind offer and though I’d like to see it don’t bother. If you find something like it please post. And I’d like to see it include all of the world currencies.

    And a weak dollar has a lot to do with oil prices.

    jharp (9b1a32)

  137. And I’d like to see it include all of the world currencies.

    A capital idea. I can imagine nothing more germane to the price of oil than the relative strength of the rupee against the dollar.

    bridget (e8e4c8)

  138. bridget,

    Why would you think the strength of the rupee against the dollar would be insignificant?

    Isn’t the increased demand from Indian your claim the “only” reason for $140 barrel oil?

    Correct me if I’m wrong but I thought they paid in rupees.

    jharp (9b1a32)

  139. bridget,

    I found this and what a coincidence.

    “In 2007, India experienced rapid appreciation of its currency against the US dollar. The reasons for the appreciation of the rupee were a generally weak dollar in international currency markets”

    jharp (9b1a32)

  140. Isn’t the increased demand from Indian your claim the “only” reason for $140 barrel oil?

    No. You forgot China, the population and technological growth here in North America, the utter lack of new refineries, the utter lack of any kind of new nuclear power plants, and the apparently premanent prohibition against drilling on American soil that happens to be directly above the world’s largest potential oil field (at least three times the size of the largest Saudi field). That adds to the unstability of the market, which drives up prices.

    Add in all those pension programs (such as CalPERS) investing in oil and commodity futures, and the price goes still higher.

    Add in the political uncertainties in the world and threats by Iran’s ongoing attempts to get a nuclear weapon (all while telling the EU’s diplomatic teams to get stuffed), and I’m surprised that gas hadn’t yet gotten more expensive than bottled water…

    Drumwaster (d67aaf)

  141. I found this and what a coincidence.

    Link?

    Or are you simply ripping that quote out of context, or making it up?

    Paul (0ea0cf)

  142. Paul,

    No, I dont have the link and it’s dam tough to find information on currency valuations.

    I offer my original quote and would welcome any refutation if you can.

    “In 2007, India experienced rapid appreciation of its currency against the US dollar. The reasons for the appreciation of the rupee were a generally weak dollar in international currency markets”

    I don’t know why you all won’t just admit it and move on. The weak dollar has and has had a significant impact on the price of oil.

    jharp (9b1a32)

  143. “No. You forgot China,

    No, I didn’t though I didn’t mention it. My business is trading with China and the weak dollar is having a significant impact.

    Don’t know what to say about the rest of your post as it seems to be quite a bit of rambling with no substance.

    If you’d like to be specific I’d be happy to share my thooughts.

    ‘ the population and technological growth here in North America, the utter lack of new refineries, the utter lack of any kind of new nuclear power plants, and the apparently premanent prohibition against drilling on American soil that happens to be directly above the world’s largest potential oil field (at least three times the size of the largest Saudi field). That adds to the unstability of the market, which drives up prices.

    Add in all those pension programs (such as CalPERS) investing in oil and commodity futures, and the price goes still higher.

    Add in the political uncertainties in the world and threats by Iran’s ongoing attempts to get a nuclear weapon (all while telling the EU’s diplomatic teams to get stuffed), and I’m surprised that gas hadn’t yet gotten more expensive than bottled water…

    jharp (9b1a32)

  144. Don’t know what to say about the rest of your post as it seems to be quite a bit of rambling with no substance.

    It was an ongoing list of things that you clearly hadn’t taken into account.

    Now that you know what I was “rambling” about, got anything to say about your lack of serious thought into this matter?

    I don’t know why you all won’t just admit it and move on.

    Because, you stupid little girl, you haven’t yet learned that there are other things that are not anyone’s fault, and they have a MUCH greater impact on the price of anything, much less oil.

    Are you ready to admit that the Democratic control of Congress has had more to do with the weakness of the dollar than anything else. The strength of any economy’s currency has a great deal to do with the confidence people show in that currency. When people don’t have any confidence in what the legislators are going to do next, they aren’t going to trust the economy, especially when the party controlling the purse strings are gleefully yammering about nationalizing the oil industry and raising taxes on everyone they can. Even suing foreign governments to get more oil while still refusing to allow increased production from domestic sources.

    That damages consumer confidence (reflected in the lowest approval rating for Congress since they started taking polls), and damages the currency, as well.

    Too bad you can’t wrap your mind around any of that and learn from being embarrassed by facts.

    Drumwaster (d67aaf)

  145. Drumwaster,

    Settle down. I point out a rambling post and you respond with a more rambling post.

    I guess I just pick one bit of nonsense to address and I’ll start at the top.

    “Because, you stupid little girl, you haven’t yet learned that there are other things”

    And why would you think I am not aware of other things affecting the price of oil. And I suppose you mean like invading Iraq and disrupting production. Of course it has an impact.

    “that are not anyone’s fault”

    Har dee har har. Good one. No one could have anticipated. You’re killing me. The buck stops anywhere but with George Bush.

    “and they have a MUCH greater impact on the price of anything, much less oil.”

    So how much impact and do what do you refer to. Anxious to hear this one.

    jharp (9b1a32)

  146. And why would you think I am not aware of other things affecting the price of oil.

    The arguments you have been making, specifically some sort of fixation on the declining value of the dollar being the reason (not main reason, not one of the reasons, but the reason) for the spike in oil prices, and I pointed out several other factors having nothing to do with the GOP (being, in fact, mostly due to domestic Democratic policies and foreign events beyond the control of anyone in this country).

    Those factors are even more responsible for the increased price of a barrel of oil, but you haven’t mentioned any of them.

    Why is that? Fixating on only those things that can be blamed on the political opposition as you see it? That merely marks you as nothing more than a political hack. Lack of comprehensive thought into the matter? Fails to explain your fixation, because even a moron will stop arguing once he has been shown what the facts are.

    You tell me. Why are you only now pretending that you have actually given any of those things any thought whatsoever? (You haven’t even hinted at other alternatives ere now…)

    The buck stops anywhere but with George Bush.

    How is Congress refusing to open any domestic drilling the fault of Bush? How is increased Chinese demand (caused by the Chinese government subsidizing gas prices in China) Bush’s fault? How is increased population pressure in India and China Bush’s fault?

    You’ve given it all this thought, had all of these issues brought up and Bush is still the only one you can come up with to blame?

    Intellectual honesty. Letz me show you it.

    So how much impact and do what do you refer to.

    Try re-reading the above.

    Drumwaster (d67aaf)

  147. Drumwaster,

    I cited Steven H. Hanke.

    Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore

    “Every commodity trader knows that all commodities trade off changes in the value of the greenback. When the value of the dollar falls, the nominal dollar prices of internationally traded commodities, like gold, rice, and oil, must increase because more dollars are required to purchase the same quantity of any commodity. Accordingly, a weak dollar should signal higher commodity prices. And it does.”

    “For example, if the greenback had held its January 2001 value against the euro, oil would have traded at about $76 a barrel in May 2008. This is almost $50 below the price that crude oil was trading at in May 2008. Accordingly, the decline of the dollar’s value accounted for a whopping 51% of the $97 a barrel increase in the price of oil from May 2003-2008.”Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore

    And you respond with this.

    “The arguments you have been making, specifically some sort of fixation on the declining value of the dollar being the reason (not main reason, not one of the reasons, but the reason) for the spike in oil prices”

    Astounding. Drunk, stoned, or stupid is no way to go through life.

    jharp (9b1a32)

  148. So sober up and quit reading Greenwald, jharp.

    Oh, and go learn your fractions.

    SPQR (26be8b)

  149. Every commodity trader knows that all commodities trade off changes in the value of the greenback.

    But you are claiming that the value of oil is based on the value of the Euro. Either he is wrong, or you are.

    Drunk, stoned, or stupid is no way to go through life.

    You seem to be doing pretty well at it. They haven’t committed you yet…

    Drumwaster (d67aaf)

  150. jharp,

    I don’t think Steven H. Hanke attributes current oil prices to currency issues or, if he does, it’s not the main cause. In this June 30, 2008, Forbes’ article, Professor Hanke apparently blames inefficient government-controlled hoarding and attempts to control commodity prices.

    DRJ (865fdd)

  151. Whoa, DRJ burns jharp with his own source.

    I am in awe.

    SPQR (26be8b)

  152. Drum,

    Please, you’re wearing me down.

    My citation “Every commodity trader knows that all commodities trade off changes in the value of the greenback.”

    Your response

    “But you are claiming that the value of oil is based on the value of the Euro. Either he is wrong, or you are.”

    I have not, did not, nor do I claim the value of oil is based on the value of the Euro.

    Are you just making stuff up to needle me or are that much of a dunce?

    jharp (9b1a32)

  153. I’d think you would have learned not to call others “dunce” by now, jharp.

    Obviously, I’m wrong. You haven’t learned anything.

    SPQR (26be8b)

  154. jharp,

    I don’t think Steven H. Hanke attributes current oil prices to currency issues or, if he does, it’s not the main cause. In this June 30, 2008, Forbes’ article, Professor Hanke apparently blames inefficient government-controlled hoarding and attempts to control commodity prices.

    Comment by DRJ — 6/27/2008 @ 11:46 pm

    Whoa, DRJ burns jharp with his own source.

    I am in awe.

    Comment by SPQR — 6/27/2008 @ 11:49 pm

    You two are a couple of retards. He didn’t even mention currency valuations effect on oil prices.

    W.T.F.

    The article was about strategic petroleum reserves.

    And just in case you boneheads don’t get it. The amount of oil in our strategic petroleum reserves certainly affects the price of oil.

    What do you think? Dump em? No reason to hold 70 days worth of oil in case of catastrophe?

    jharp (9b1a32)

  155. The amount of oil in the SPR affects the price of oil? Wow, that would be what … supply and demand?

    SPQR (26be8b)

  156. The amount of oil in our strategic petroleum reserves certainly affects the price of oil.

    Not while it is just sitting there in reserve. A commodity that is not a part of the national supply being used by the citizens of that nation doesn’t affect anything.

    If the POTUS were to authorize the release of some of the SPR, that would then affect the supply (by increasing it slightly), and if he were to start adding to the SPR, it would affect the demand (again, only slightly).

    I say “only slightly” because the SPR is a mere drop in the bucket compared with the global supply and demand (which is what we are discussing). If it were at maximum capacity (727 million barrels, scattered over several storage sites in Texas and Louisiana), it could theoretically supply national needs for a whopping sixty days.

    You might as well blame the owner of the gas station on the corner – when he fills his underground tanks, he is driving prices up (by mere fractions of a fraction of a percentage point), and when he starts selling that gasoline, he is driving gasoline prices down again by the same margin.

    There are locations within the borders of the lower 48 States that have proven reserves that dwarf the SPR, and Congress won’t let us touch them, but seems to have no problem whinging about Bush not releasing the contents of the Strategic Petroleum Reserve during a time of war.

    Drumwaster (d67aaf)

  157. JHarp,

    There is no need to call your opponents “a couple of retards,” “boneheads,” or “dunces.” Not one of your opponents is acting with so little intelligence to merit criticism for it, let alone with the venom that you’ve used.

    As for the rupee – it is used in six different countries. Sri Lanka, Nepal, Pakistan, Maulitius, and Seychelles all have a currency that is given the name of “rupee.”

    India, if you wish to bring it up, does not have a free market for gasoline. The government fixes the price, then reimburses locals who may lose money on the transaction.

    Just sayin’.

    bridget (e8e4c8)

  158. Hanke as a matter of principle is against government intervention in commodity markets because they have a tendency to screw it up. Why he thinks the U.S. would do any better intervening in the currency markets to adjust the value of the dollar he doesn’t explain.

    The original article that the harpmeister didn’t have the coutesy to provide a link for is here:

    http://www.seeurope.net/?q=node/15952

    daleyrocks (d9ec17)

  159. Patterico – Comment with a link is in the filter, thanks.

    daleyrocks (d9ec17)

  160. As for the rupee – it is used in six different countries. Sri Lanka, Nepal, Pakistan, Maulitius, and Seychelles all have a currency that is given the name of “rupee.”

    And it is the currency of India.

    “India, if you wish to bring it up, does not have a free market for gasoline.”

    Don’t see how his relates.

    jharp (9b1a32)

  161. Don’t see how his relates.

    Of course not. Look! Puppies and kittens!

    Drumwaster (d67aaf)

  162. jharp wrote:

    Stupid I can take. Dishonesty I loathe.

    Later, I cited an anecdote about a retired realtor’s studious avoidance of supply/demand issues so she could keep blaming gas prices on Republicans and the oil industry exclusively.

    I have an old friend who was in the real estate industry, and when the subject of oil prices came up, I said I was relieved to be talking with someone who understood the concept of supply and demand, and its impact on prices. She started up with the “greedy oil company” schtuff, and out of respect, I let her finish. Then I said, “But you understand supply and demand as someone who made her living in real estate, right?” She stammered, paused, and went right back into her rant, as if she hadn’t heard me say anything. She couldn’t bear to admit that increasing supply would (eventually) reduce prices, and that the evil oil execs (and Bush & Cheney) could have a point.

    jharp responded:

    Do you understand the concept of a monopoly?

    An oligopoly?

    It’d be nice if it was as simple as you believe it to be in your simple mind.

    But it ain’t.

    I responded:

    So…(playing along)…which are we discussing, harpy? Mono- or Oligo-?

    Drumwaster also responded:

    Lewt’s pretend that YOU do for a moment (pardon me while I still the guffaws), and ask you the best way to destroy a monopoly or oligopoly (or cartel, for that matter).

    Take your time. I’ll wait.

    How has harpy responded? With silence. Like my friend when it came to supply and demand, harpy is being INTELLECTUALLY DISHONEST.

    Which brings me back to what he previously wrote:

    Stupid I can take. Dishonesty I loathe.

    My response to that was the following:

    I guess the key to your oversatisfaction with yourself is that you’re too stupid to recognize your own dishonesty.

    L.N. Smithee (910937)

  163. No, just enough of a Greenwald fan to think he can get away with it.

    SPQR (26be8b)

  164. One of the rumors is that the high oil prices are President Bush’s payback to his Texas oil patrons for getting him elected.

    Is there anyone investigating if this is actually the George Soros type billionaire money manipulators trying to tank the economy for Obama and the leftists?

    Seems to make as much sense.

    jeff (50540a)

  165. One of the rumors is that the high oil prices are President Bush’s payback to his Texas oil patrons for getting him elected.

    Then why wouldn’t have he driven up prices long before now?

    Or maybe, just maybe (and I’m just spitballing here, so go with it), the President doesn’t have anything to do with setting prices, and it is really because of global demand?

    Drumwaster (5ccf59)


Powered by WordPress.

Page loaded in: 0.5937 secs.