"The best tar-sands companies need to get $50 per barrel for their oil to break even. The rest need between $50 and $90 per barrel. Today, a barrel of bitumen sells for just $56."
November 10, 2014 Quote from Matt Badiali, editor of S&A Resource Report
"Investors in Canadian oil sands are at a heightened risk of companies wasting $271 billion of capital on projects in the next decade that need high oil prices of more than $95 a barrel to give a decent return.", the Carbon Tracker Initiative (CTI) revealed today."
November 4, 2014 Quote from Carbon Tracker Initiative
THE TRUE COST OF OIL
Garth Lenz, November 2011 TEDx Victoria BC
Lest we forget—lest we forget!
Rudyard Kipling 1897
Is it Secular?
The U.S. Case-Shiller 20 City Composite housing data to July 2014 were released and looking at the M/M and Y/Y charts it's easy to see that seasonal buying has again collapsed as we batten down the hatches against the coming winter.
The 2014 M/M peak failed to breakout from under the 2013 M/M peak and the 2014 Y/Y momentum has been in a down trend since 2013 as well.
The downturn is seasonal for sure and looks like a cyclical down trend as well with lower highs being put in after the run up out of the 2009 Pit of Gloom.
If U.S. housing is in a secular down trend, it began way back in 2004 (see the Y/Y data) and we should see momentum attempting a test of the Pit of Gloom. That would take a big shift in sentiment in the animal spirits.
What could cause that?
Left, Right or Down
The national wire service press subscribers refer to the Broadbent Institute's September 2014 study "Inequality and the Fading of Redistributive Politics" Edited by Keith Banting and John Myles (see the quoted paragraphs and link to the source material below) as being "left leaning" I am willing to bet that the bottom quintiles of earners are more concerned with the direction of "down".
Deep and Persistent Wealth Inequality in Canada
Bill Maher - Wealth Inequality in America
I continue to make the point that the bet on capital gains from real estate is not through inflation but through speculation. The speculation might be about inflation, but if inflation was the case, we would see employment earnings keeping pace, and they're not. From CBC News July 15, 2014 comes this "Microsoft expected to cut jobs in wake of Nokia deal." and quote:
“We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes,” Satya wrote. “Culture change means we will do things differently.” said Satya Nadella, CEO of Microsoft.
The management will employ fewer people to give us feedback about our ideas by reducing the number of different levels of employment pay so that our cost of doing business is reduced on our balance sheet. We are forced to reduce our inhouse activities.
I have a job contract to fulfill and you don't. You no longer have employable skills here.
Software is eating the world.
"This is the basic insight: Software is eating the world. The Internet has now spread to the size and scope where it has become economically viable to build huge companies in single domains, where their basic, world-changing innovation is entirely in the code. We’ve especially seen it in retail — with companies like Groupon, Zappos, Fab." Marc Andreessen Wired interview April 24, 2013
How Technology Is Destroying Jobs
"Job Switching" from I Love Lucy
History, Charts & Curated Readings
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'