S&L 2.0?

[bokworker]

Oil and gas prices are keeping my company busy and in the black. I'm seeing though that orders for large equipment from manufacturing sectors is starting to lag and get postponed. Speaking with my contacts, it's a fear of future sales slowdowns which are putting off capital investment, not a real slow down in their sales numbers at this point.

IOW- they are hanging on to money and not contributing to growth of the economy, due to rumors and speculation.


Conan....now that is a bit telling, however, do you get the feeling it is due to a disbelief that oil prices can stay where they are or is it economic weakness? In many ways our economy would benefit from lower oil prices while the energy business would suffer a bit.

[Conan71]

quote:Originally posted by bokworker

Oil and gas prices are keeping my company busy and in the black. I'm seeing though that orders for large equipment from manufacturing sectors is starting to lag and get postponed. Speaking with my contacts, it's a fear of future sales slowdowns which are putting off capital investment, not a real slow down in their sales numbers at this point.

IOW- they are hanging on to money and not contributing to growth of the economy, due to rumors and speculation.


Conan....now that is a bit telling, however, do you get the feeling it is due to a disbelief that oil prices can stay where they are or is it economic weakness? In many ways our economy would benefit from lower oil prices while the energy business would suffer a bit.

The energy business would still be making obscene amounts of money at $80/bbl crude and $7/mcf of natural gas.

The rest of the economy could benefit very well from lower oil prices, specifically if it would get the cost of diesel ($3.74 last I looked) back down into the lower $2.00 range.  That's driving prices up on everything.  $3.09 gas means workaday folk who live paycheck-to-paycheck don't have as much to spend on food, new clothing, fishing gear, toys, new cars, or vacations this summer.  It can have the effect of pushing people to buy more fuel-efficient cars, but if they don't have a car payment or can't qualify for a car payment, chances are, they are not a new car customer.

Oil sector greed definitely hurts the little guy and there's not much can be done about that other than the gov't offering more "tax rebates" to the lowest income-earners.

Anything oil or energy-related is going great guns, and would continue to do so even at $60/bbl even though that might put a little crimp in the oil business spending orgy.  What the high prices are accomplishing is updating a lot of oil and gas refining and delivery infrastructure which has not been updated extensively since the 1980's.  Of course, this binge is a bit scary, due to memories people have of the early '80's when oil plunged from $40+/bbl to less than $9.

Higher energy prices and uncertain future supplies are causing more investment in alternative energy development.  My company doesn't make a dime off solar, wind, or hydro.  We can get our snouts in the trough in bio-diesel, ethanol, biomass reactors and other liquid and solid fuels though.

It's durable and perishable goods manufacturing is where they are holding off on new capital projects, though we have had some some who simply changed their project to include used rather than new equipment, so it's not a total bust for us, but it doesn't help any of our manufacturing partners on up the supply chain.

[we vs us]

quote:Originally posted by Conan71

quote:Originally posted by we vs us

quote:Originally posted by Conan71

That's all I'm left to believe is that when an investor like FOTD is dumbing down the economy, he's got something to gain by it or he has absolutely no grasp on how it affects his investments.

I mean, yeah, but . . . isn't that sensitivity to speech proportional to the possible effect the speaker can possibly have on an economy with a GDP of $13 trillion? I mean, FOTD's posts are a drag, no doubt, but his individual effect on the national -- not to mention global -- economy is less than nothing.

One person like FOTD/AOX does not affect it.  

One person like Alan Greenspan (who should keep his mouth shut as he is no longer the chairman of the Fed) his words can move financial mountains.  So can the President or prominent political candidates.

It's the cumulative effect of several million FOTD's plus the media talking down the economy which can literally cause people to lose jobs and orders to slow down, not one loose screw unless that screw has the platform and respect like Greenspan.

Oil and gas prices are keeping my company busy and in the black.  I'm seeing though that orders for large equipment from manufacturing sectors is starting to lag and get postponed.  Speaking with my contacts, it's a fear of future sales slowdowns which are putting off capital investment, not a real slow down in their sales numbers at this point.

IOW- they are hanging on to money and not contributing to growth of the economy, due to rumors and speculation.

I figured that was what you meant.  And yeah, if we're talking Chatty Cathies like Greenspan, he has perhaps on outsize affect on markets.

[Conan71]

quote:Originally posted by twizzler

quote:It's the cumulative effect of several million FOTD's plus the media talking down the economy which can literally cause people to lose jobs and orders to slow down,.....

A similar thing happens when multiple voices hyper-promote an economy to an unrealistic bubble state, which then bursts, and people lose jobs and orders slow down.

Very true.  Promise of better things to come will get people to borrow more money than is reasonible or certainly more than they'd borrow on lifestyle if the economy were headed toward recession.

The housing debacle which seems to be the focus of this is a result of government enticing the greed of lenders by requiring them to make a quota of normally hands-off loans.

Call me guilty of promoting, but Tulsa is a great place to be right now, and should be for some time, economically-speaking.

[cannon_fodder]

Good (and very fair) point twizzler.  

We tend to get more cheerleaders as more have bets on the pass line than don't pass.  Though, like the at the table the don't pass bet is always an unpopular one.
- - -

On the oil note:  I was told in my O & G classes at TU that at $60 a barrel every well makes money and it was worth opening up old wells.  At $80 a barrel it is worth adding infrastructure to existing wells.  So I'd have to say at $100 it is worth spending ANYTHING to squeeze the last drops of oil from a well.

Conventional wisdom (read:talking heads) think oil will come off to $85 or so, but the plateau has been reached and sustained long enough that there is no incentive to come off any more than that.  The threat of dropping demand is no longer valid with China and India picking up speed and bidding against US and Europe for the oil.

If only there were vast pools of domestic oil in uninhabited federally owned lands somewhere outside the visible coastlines of Florida or California or way up in Alaska that contained trillions of dollars worth of oil and gas.  Wouldn't that be great?

Long term we need to kick the habit at the consumer level, no doubt about that.  Industrial NEEDS oil, consumers could be taught to cut way, way back.

[Conan71]

Interesting how economic news is either glass half full or half empty.

Business section of the World this morning:  

House prices are down an average of 10% or so. Some would spin that to be a disaster.  I suppose so if you are a builder and you wind up taking a hit, but if you've been a builder for some time, then you benefitted from the orgy of over-heated markets.  Probably not the best news for a bank trying to sell foreclosures either.

However, this is great news for the consumer and it translates to the over-inflated housing market correcting- by as much as 19% in Miami.

This is something which needed to happen.  Should be welcome news to RE agents, title companies, loan originators, etc. as it will help stimulate more sales.

[cannon_fodder]

I do not mean to hold myself out as an expert on this Twiz... but my understanding is that the remaining production would be squeezed from already explored and most often existing sites.  In some instances the rate of pumping made it worthless as an existing well (the first 25% is easy and gets harder and harder), in other's the depth was not worth drilling for, and still more instances the replacement of infrastructure wasn't worth continuation of production.

With higher prices, these things now make sense.  So you really wouldn't need exploratory wells to increase or maintain production (recall it was falling off before the recent spike).

Gas, on the other hand, is rumored to be near a boom in Oklahoma.  I hear persistent rumors of a huge new deep field in SW Oklahoma.

Again, not an expert and I no longer work in the industry.  So take it with a grain of salt.

[Conan71]

quote:Originally posted by cannon_fodder



Gas, on the other hand, is rumored to be near a boom in Oklahoma.  I hear persistent rumors of a huge new deep field in SW Oklahoma.

Again, not an expert and I no longer work in the industry.  So take it with a grain of salt.

I've got a beautiful bright blue large piece of equipment headed to SW Oklahoma end of this week, with many more to follow...

Yes, NG is doing very well out that way.

[FOTD]

quote:Originally posted by Conan71

quote:Originally posted by cannon_fodder



Gas, on the other hand, is rumored to be near a boom in Oklahoma.  I hear persistent rumors of a huge new deep field in SW Oklahoma.

Again, not an expert and I no longer work in the industry.  So take it with a grain of salt.

I've got a beautiful bright blue large piece of equipment headed to SW Oklahoma end of this week, with many more to follow...

Yes, NG is doing very well out that way.

You live in a bubble. It will pop all over you....

Eight Steps to a Trillion-Dollar Meltdown

By Charles R. Morris

http://www.foreignpolicy.com/story/cms.php?story_id=4240

"Who is to blame for the U.S. financial crisis? A review of the road to ruin reveals a course littered with more villains than heroes."

"All current rescue proposals being floated in the U.S. Congress have the taxpayer buying up the loans the banks no longer want, absorbing the losses just as taxpayers did in the savings and loan crisis of the late 1980s."


step 1: allow supreme court to appoint a**hole as president.
step 2: allow a**holes to reelect a**hole as president.
step 3-6: pretend a**hole isn't screwing up everything he touches.
step 7: blame democrats in congress, not a**hole, for screwing everything up.
step 8: vote for older, dumber a**hole.(Economic Slump Underlines Concerns About McCain Advisers.... http://www.washingtonpost.com/wp-dyn/content/article/2008/04/01/AR2008040102860.html?hpid=topnews "McCain is counting on people having very short memories and not connecting some pretty obvious dots here,")

[Conan71]

FOTD, you certainly are more problem-oriented than solution-oriented.  I bet you were a difficult child.

I find it hard to believe a person of your means isn't riding the oil and gas train right now.

[FOTD]

quote:Originally posted by Conan71

FOTD, you certainly are more problem-oriented than solution-oriented.  I bet you were a difficult child.

I find it hard to believe a person of your means isn't riding the oil and gas train right now.

You should not assume things Conan.

I have offered many solutions. You chose to ignore impeachment, recounts, enforcement of our constitution, getting out of Iraq (never going in there to begin with...), choosing real leaders, better educating our populace, questioning authority, putting regulation back in government, giving a hand up through social programs (for those that can least afford them) etc. etc. etc.

You know Conan, at times we are all difficult but you can't put me in with you sheep.