This post is by Jim Fitch of Some Assembly Required.
Cheer up, this may be the last crisis of the oil age.
Does This Dress Make Me Look Fat? The Fed needs to raise rates to combat inflation… while lowering rates to encourage economic growth. Congress needs to exercise fiscal responsibility… while bolstering the economy. Peak Oil means we must conserve energy and expoloit alternatives… while drilling for more crude. Why does anyone want to be president?
On the Trail: Obamma seems to have no idea, or far too many ideas, as to what the US response should be to the Russia/Georgia contest. McCain has but one answer, aggression everywhere. Both are wrong. The problem is that the US has no credible way to threaten Russia or support Georgia without making matters much, much worse.
Dominoes: Ever cheerful Nouriel Roubini sees a serous and protracted global recession, enveloping not just the US and the G7, but the entire Eurozone, the BRIC’s and everyone else.
Au Contraire: The markets seem to think the drop in crude oil prices is proof that there is lots of supply and that the peak oilers have been disproven. Not so, wild gyrations in price at the time of peak oil has been expected and predicted. The trouble is that whether this price gyration is a proof or disproof of peak oil will not be known until we can see today clearly in the rear view mirror.
Sad Fact: A toxic combination of $4 gasoline, voter anxiety and presidential ambition is making it impossible for this country to have the grown-up conversation it needs about energy.
Something to Chew On: Pilgrim’s Pride, the largest chicken producer in the US is losing money on every chicken it processes and will stop production at two plants, cutting employees by 2,300 while cutting production 11.5% this year.
Takes One To Know: Nobu Su, who owns 20 Very Large Crude Carriers, predicts that rental rates for oil tankers will triple by the first quarter of 2009, driven by a renewed jump in energy prices on increased demand and political instability.
Some Assembly Required reflects my somewhat cynical view of the world on a daily basis. Think of it as having coffee with a curmudgeon. I want to thank Yves for the opportunity to come over and play. I’m going home now. Come visit; bring your own coffee.
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Sad Fact:
It is impossible for this country to have a grown-up conversation about any of its needs.
Re: Pilgrim's Pride, the largest chicken producer in the US is losing money on every chicken it processes..
>> That sounds like Chrysler, Ford, GM and most of the wall street banks that have no clue as to how to run a business; maybe the chicken industry can repackage debt and resell its debt, as if it were selling skin and bones as prime filet? Maybe they need a bailout or poultry derivatives? I guess instead of being a smartass, I should read the story and see why they have problems, and how The Fed can help with socializing insider losses…
On Georgia/Russia… it’s hard to know whether McCain/Obama have nothing to say or just don’t want to say it. Think of the Cuban Missile Crisis: crisis diplomacy is about sending signals, horse-trading and not-altogether-public deals that let everybody save face. Of course, in America taking nuanced positions is political suicide, and more substance just means more raw material for your opponent to spin.
OK, maybe it’s me, but I’m hung up on the chicken story. Who’s squeezing Pilgrim’s Pride that they can’t raise the prices a little? Or maybe no one wants the hormone-laden dreck they sell? I switched to all organic food and I’m much happier (and healthier), despite the increased costs.
Chickens Fried By Oil Prices!!!
Pilgrim’s Pride, the largest U.S. chicken producer by volume, racked up a fiscal third-quarter loss of $52.8 million. A year earlier, it posted a profit of $62.6 million.
Costs for corn and soybean meal to feed its chicken flock have been a drag for the producer. For the quarter ended June 28, Pilgrim’s Pride said grain costs jumped 41% from a year ago.
Meanwhile, prices for chicken-breast meat are fetching $1.33 a pound, below the five-year average for August of $1.63 a pound. Chicken companies usually make more of a profit in the summertime barbecuing season, as demand increases for breast meat. But the industry is still supplying too much chicken, hurting profits at a number of companies.
Phil,
So true. And what little dialogue there is, is over simplified.
On Georgia/Russia…There is precious little (read: nothing meaningful) the US can do. Now, does anyone know of any US politician ready to bluntly acknowledge publicly this simple fact?
Sad Fact: No dialog can take place when spin, lies, swift-boating and Geobbelian tactics win elections. This is as much an indictment of the political class than one of the voters who either voted for the Repugnicrats or did not vote at all.
If it bleeds, it leads; if it thinks, it stinks.
What better way to screw up a country than adopting such a mind set?