Did you know that the drought in Brazil is so bad that some neighborhoods are only being allowed to get water once every three days? At this point, 142 Brazilian cities are rationing water and there does not appear to be much hope that this crippling drought is going to end any time soon. Unfortunately, most Americans seem to be absolutely clueless about all of this. In response to my recent article about how the unprecedented drought that is plaguing California right now could affect our food supply, one individual left a comment stating “if Califirnia can’t supply South America will. We got NAFTA.” Apart from the fact that this person could not even spell “California” correctly, we also see a complete ignorance of what is going on in the rest of the planet. The truth is that the largest country in South America (Brazil) is also experiencing an absolutely devastating drought at the moment. They are going to have a very hard time just taking care of their own people for the foreseeable future.
And this horrendous drought in Brazil could potentially have a huge impact on the total global food supply. As a recent RT article detailed, Brazil is the leading exporter in the world in a number of very important food categories…
Over 140 Brazilian cities have been pushed to ration water during the worst drought on record, according to a survey conducted by the country’s leading newspaper. Some neighborhoods only receive water once every three days.
Water is being rationed to nearly 6 million people living in a total of 142 cities across 11 states in Brazil, the world’s leading exporter of soybeans, coffee, orange juice, sugar and beef. Water supply companies told the Folha de S. Paulo newspaper that the country’s reservoirs, rivers and streams are the driest they have been in 20 years. A record heat wave could raise energy prices and damage crops.
Some neighborhoods in the city of Itu in Sao Paulo state (which accounts for one-quarter of Brazil’s population and one-third of its GDP), only receive water once every three days, for a total of 13 hours.
Are you starting to see what I mean?
This is serious.
B. Lynn Ingram, a paleoclimatologist at the University of California at Berkeley, thinks that California needs to brace itself for a megadrought—one that could last for 200 years or more.
As a paleoclimatologist, Ingram takes the long view, examining tree rings and microorganisms in ocean sediment to identify temperatures and dry periods of the past millennium. Her work suggests that droughts are nothing new to California.
A drought of even 10 years would absolutely cripple this nation. Already, the size of the total U.S. cattle herd is the smallest that it has been in 63 years and California farmers are going to let half a million acres sit idle this year because of the extremely dry conditions. If this drought persists for several more years we will have an unprecedented crisis on our hands.
Unfortunately, there are signs that this current drought in California may be part of a larger trend. I had never heard of “the Pacific Decadal Oscillation” before this week, but apparently it is a phenomenon that can cause droughts that last “for decades“…
Ingram and other paleoclimatologists have correlated several historic megadroughts with a shift in the surface temperature of the Pacific Ocean that occurs every 20 to 30 years—something called the Pacific Decadal Oscillation (PDO). The PDO is similar to an El Nino event except it lasts for decades—as its name implies—whereas an El Nino event lasts 6 to 18 months. Cool phases of the PDO result in less precipitation because cooler sea temperatures bump the jet stream north, which in turn pushes off storms that would otherwise provide rain and snow to California. Ingram says entire lakes dried up in California following a cool phase of the PDO several thousand years ago.
And of course it isn’t just the western half of the country that is struggling with water supply problems. In the Southeast, water has been a major political issue for quite some time…
The drought-parched states of Georgia, Alabama and Florida are back at it — fighting for a slice of water rights in a decades-long water war that’s left all three thirsty for more.
The 24-year dispute is emblematic of an increasingly common economic problem facing cities and states across the country – the demand for water quickly outpacing the supply as spikes in population soak up resources.
Most of us that live in the United States are accustomed to having seemingly inexhaustible supplies of fresh water. We use more fresh water per capita than anyone else on the planet, and most of us never even think twice about it.
Unfortunately, things are changing. We are on the precipice of a great water crisis, and many Americans are going to be in for a very rude awakening.
And the frightening thing is that the U.S. is actually in much better shape than most of the rest of the world is when it comes to supplies of fresh water. In some areas of the globe, a “water crisis” is already a daily reality.
We have heard that someday water is going to become the “new oil”, and we are starting to get to that point. Life is simply not possible without water, and as global supplies of clean, fresh water dwindle it is inevitable that it is going to cause global tensions to rise.
So what do you think the solutions to these problems are?
The US is adding its $0.02 to the international condemnation of the actions under way in Ukraine – desparate to re-write Victoria Nuland’s narrative of “f##k the EUR” and political manipulation. President Obama, having not learned his lesson the last time he drew a red line, has come out swinging…
- *OBAMA:`THERE WILL BE CONSEQUENCES IF PEOPLE STEP OVER THE LINE’
- *OBAMA SAYS U.S. CONDEMNS UKRAINE VIOLENCE IN `STRONGEST TERMS’
- *OBAMA:MILITARY SHOULDN’T ACT WHERE CIVILIANS CAN RESOLVE ISSUES
Of course, it’s unclear if open military action against civilians is ‘crossing the line’ but we await Putin’s response.
More from the WSJ:
The Obama administration is considering sanctions against Ukraine, possibly in concert with European allies, saying the threat of penalties may push the government in Kiev to halt the deadly violence there.
“All of us are deeply disturbed,” Secretary of State John Kerry said during a brief appearance in Paris with his French counterpart. “We are talking about the possibility of sanctions or other steps with our friends in Europe and elsewhere in order to try to create the environment for compromise.”
Mr. Kerry and other U.S. officials didn’t detail what those sanctions might entail, but the administration in the past has held out the threat of individual sanctions, typically steps that freeze assets and limit travel.
The threat from the U.S. comes after violent clashes in Kiev this week have claimed the lives of at least 25 people and as the Obama administration and its European counterparts try to get a handle on the situation.
Ukrainian President Viktor Yanukovych has blamed opposition leaders for the violence, while opposition leaders said the government was responsible.
Ben Rhodes, a deputy National Security Adviser to President Barack Obama, said the administration hopes the threat of sanctions will quell some of the violence. “We have made it clear we would consider taking action against individuals who are responsible for acts of violence within Ukraine,” he said while traveling with Mr. Obama to Mexico. Mr. Obama is headed to Mexico, among other reasons, to discuss trade.
In the last year, China has increased the military activity and actions in the South China Sea around the so-called Nine Dash Line — China’s expansive claim into the region which is in conflict with several other international claims.
China’s Nine-Dash Line
As USNI reports, Capt. James Fannell, deputy chief of staff intelligence and information operations for PACFLEET, notes that while China has long trained for an amphibious invasion of Taiwan during military exercises but has expanded its training to include a similar attack on Japanese holdings in the East China Sea. He concludes, “the PLA has been given the new task to be able to conduct a short sharp war to destroy Japanese forces in the East China Sea following with what can only be expected a seizure of the Senkakus or even a southern Ryukyu [islands].”
As part of China’s Mission Action 2013 exercise — a massive exercise between the all branches of China’s People’s Liberation Army (PLA) — the military trained for taking the Senkaku Islands, said Capt. James Fannell, deputy chief of staff intelligence and information operations for PACFLEET.
View China’s Training Plan in a larger map
“We witnessed the massive amphibious and cross military region enterprise — Mission Action 2013,” Fannell said at the West 2014 conference on Feb. 13 in San Diego, Calif.
“[We] concluded that the PLA has been given the new task to be able to conduct a short sharp war to destroy Japanese forces in the East China Sea following with what can only be expected a seizure of the Senkakus or even a southern Ryukyu [islands] — as some of their academics say.”
“As a senior U.S. government official recently stated, there is growing concern that China’s pattern of behavior in the South China Sea reflects an incremental effort by China to assert control of the area contained in the so-called 9-dash line despite the objections of its neighbors, and despite the lack of any explanation or apparent basis under international law.” Fannell said.
He then detailed a series of what he called aggressive actions taken by China against its neighbors over the past year. Some of those actions, including combat drills in the south Philippine Sea were described as China’s “protection of maritime rights.”
“By the way, protection of maritime rights is a Chinese euphemism for coerce seizure of coastal rights of China’s neighbors,” Fannell said.
“Tensions in the South and East China Seas have deteriorated with the Chinese Coast Guard playing the role of antagonist, harassing China’s neighbors while PLA Navy ships, their protectors, (make) port calls throughout the region promising friendship and cooperation.”
Fannell’s assessment of the Chinese lies seemingly in contrast to American efforts to forge close military-to-military ties with the country.
Just as we warned earlier, the stealing of the weapons cache and labeling of the break-away region as having undertaken “terrorist acts” has led to the military getting involved:
- *UKRAINE ARMY GIVEN POWER TO CHECK CIVILIAN VEHICLES
- *UKRAINE ARMY GIVEN POWER TO USE WEAPONS ON UKRAINIANS: MINISTRY
Under the “anti-terrorist” operation, Ukraine is a close to civil war as it has been so far. As Martin Armstrong concludes: “there is no peaceful resolution” no matter how many sanctions and condemnations the West makes.
Below is the Google-translated Government Statement which was posted on the Ministry of Defense website moments ago:
In connection with the decision to commence in Ukraine antiterrorist operation Ministry of Defense of Ukraine official statement:
According to Article 5 of the Law of Ukraine “On combating terrorism” Ministry of Defense of Ukraine, bodies of military management, formations and units of the Armed Forces of Ukraine to protect against terrorist attacks facilities of the Armed Forces of Ukraine, firearms, ammunition, explosives and poisonous substances that are in the army or stored in designated areas.
Under section 15 of the Act, in the area of ??counter-terrorist operations of the Armed Forces of Ukraine have the right to:
– use in accordance with the laws of Ukraine weapons and special means;
– apprehend and deliver to the internal affairs of persons who commit or committing an offense or other action;
– check of the citizens and officials of documents , identification, and in the absence of documents – to detain them for identification;
– to carry out in the area of counter-terrorism operation personal care nationals review things that are in them, vehicles and things that they carried;
– Provisionally restrict or prohibit the movement of vehicles and pedestrians on streets and roads.
Measures provided for in this Article shall comply with the applicable law and terminate immediately after the anti-terrorist operation.
Coordination of activities of entities involved in the fight against terrorism has antiterrorist center of the Security Service of Ukraine.Those involved in the fight against terrorism, are under state protection.
Disobedience or resistance to lawful demands of military officials who take part in anti-terrorist operations, incur liability as provided by law.
The main purpose of the anti-terrorist operation – stop extremism and illegal actions of radical groups that threaten the lives of millions of Ukrainian, to protect civilians, prevent civil war in Ukraine.
And as a reminder from Martin Armstrong – There Is No Peaceful Resolution
Russia wants to portray this as a coup organized by the USA, Europe wants to portray this as Ukraine wanted them, and the USA media spins this as US against RUSSIA.
This began as a movement against CORRUPTION and not a Europe v Russia confrontation. The more it has played out, then this has also developed into a fight for freedom. The Russian side of Ukraine is the East and south and they speak Russian. The West speak Ukrainian so there are even two languages spoken.
The Russian side has very strong RIGHT WING elements and they are anti-gay and want 7 years in prison for a girl who gets an abortion. So there is now a religious fever being thrown into the fire.
BY ABSOLUTELY NO MEANS did this begin merely over the refusal to join Europe. The corruption in Ukraine is massive. Much of the bureaucracy is buried still in communism with no rational explanation. Under communism, the state-owned everything. Therefore, your “papers” were a form of domestic passport not good for international travel. Inside that passport you had to have your PERMANENT address assigned to you by government since you were not allowed to move. To this day, although communism collapsed and you can move, your passport must still have your “official” address. If you want to move, it will take months to get a new passport and you have to pay a bribe to get it expedited that may still be 2 months. The law forced you to return to change any document. You cannot do anything on-line.
The bureaucracy has never been reformed. There is no law saying you need an address anymore, yet nobody can change anything because it is as if there is nobody really in charge. It is a chaotic mess. The police were extorting people like the Mafia, so this began as all other protests – against corruption. Simple as that. The mainstream media is playing to the propaganda on both sides.
It appears that civil war will erupt for the younger generation want their freedom. Russia will not allow that to happen for this is a strategic former possession that was once part of Russia and Kiev was the former capital of Russia before Moscow. This is likely to fester and grow. There is no peaceful resolution.
Bitcoin is under attack by cybercriminals, bringing down some of the world’s largest Bitcoin exchanges in the process.
Bitcoin is under attack by cybercriminals, bringing down some of the world’s largest Bitcoin exchanges in the process.
Unknown attackers are exploiting a Bitcoin design flaw to record fake transactions, muddying up the Bitcoin system’s public accounting and causing widespread confusion for the centers where people trade them.
The Bitcoin flaw allows these attackers to make a withdrawal from their own account and tamper with the record of that transaction. So they could cash out, but claim they never got the Bitcoins.
Here’s how the Bitcoin glitch is exploited: All Bitcoin transactions are publicly recorded and set in stone every 10 minutes. But that leaves a large window for nefarious activity. In this case, attackers were making real transactions then immediately posting fake ones, confusing the exchanges’ accounting programs.
Computer engineers working on Bitcoin’s core functions say this kind of denial-of-service attack is inexpensive and relatively easy to pull off.
The glitch was first made public in 2011 but has not been addressed by every Bitcoin exchange. Jeff Garzik, one of Bitcoin’s core developers, said some exchanges were getting duped because their software doesn’t account for the flaw. That’s why in the last several days, Bitstamp and Mt.Gox have halted customer withdrawals. Other exchanges have created software programs that avoid the glitch.
The attacks aren’t affecting people’s wallets or the amount of bitcoins held in their personal accounts, according to Bitcoin’s leading advocates. People can still purchase goods with bitcoins, but many are unable to withdraw their money.
The assault, which is saturating the payment system with false information, has laid bare how unproven and fragile Bitcoin is right now.
“This exposes that Bitcoin is, at best, a beta project,” said Alex Daley, chief technology investment strategist at Casey Research. “Until a system like this is in wide use for many years, you’ll continue to find flaws in the implementation.”
Knocking such large exchanges offline has taken a toll on what little public confidence there is left in Bitcoin. Since Mt.Gox froze withdrawals on Friday, Bitcoin prices have fallen by more than 13% to $660.
Garzik and other developers are working on fixing a related computer bug in digital bitcoin wallets. Exchanges are also working on updating their software to prevent similar attacks in the future.
The whole event is disconcerting — but not surprising — to everyday Bitcoin users.
Jeff Thompson is an early adopter who accepts bitcoins as payment at his martial arts school, Atlanta Kick. He owns nearly 400 bitcoins, but the vast majority are on USB flash drives at home — the equivalent of keeping cash under the mattress. He lost faith in Mt.Gox long ago, transferring his money to Bitstamp. But he’s still cautious.
The problem is its own solution. Whether we try to stop the Status Quo, or let it stop, it WILL stop.
Longtime correspondent Eric A. has a new essay describing a key dynamic of the years ahead: Extortion and skimming create their own antidotes. As the costs of skimming, extortion and corruption reach new heights, the savings to be gained by bypassing the Status Quo systems also increase.
Here are a few of Eric’s previous essays:
A Brief History of Cycles and Time, Part 1 (May 13, 2013)
A Brief History of Cycles and Time, Part 2 (May 14, 2013)
Generation X: An Inconvenient Era (May 23, 2013)
The essence of my key analytic concepts, neofeudalism and neocolonialism, is that debt and other state-cartel schemes enclose and imprison the bottom 90% while leaving the illusions of liberty, democracy and “prosperity” intact so the debt-serf inhabitants of the home-country neocolonial plantations love their servitude.
Eric’s point is that the incentives to escape the home-country plantation are rising in parallel with the skimming of the state-cartel Elites.
Here’s is Eric’s provocatively insightful essay:
But that means that ANY ONE who goes around them in ANY WAY, has enormous payoff. Also creating a solution, like micro-loans, digital clearing, etc, has enormous incentive.
Simply put, so long as the out-sized pay exists, the out-sized incentive to avoid them, ignore them, go around them, re-think them, will always exist. Every minute, to every participant. So they’re really creating the solution as fast as they can.
Same with these other issues. Health Care? The kickoff of ACA (Affordable Care Act, a.k.a. ObamaCare) was the starting gun for cash-only medical care which until now only lived in the slimmest shadows. Since basically the co-pay alone is more than paying in cash–and the entire premium is 110% of direct welfare to the health lobby (a business model usually called “extortion”)– there’s no possible incentive not to ignore the system entirely and pay cash. The penalty would have to be 2x, 3x, 5x higher to come anywhere near tipping the balance. And thanks to a decade of previous screwing, the young people don’t actually HAVE the money, so even if the penalty were raised, it would have no practical effect.
Although college, with their 3x more admins, paid 2x more is a clear example, it’s the same with military, government, all these. All we have to do to save 50%, 90% or more is ignore them and let them collapse.
What do you think Detroit is doing for their present residents? As far as I can tell, basically nothing–and that’s true for cities nationwide. All we have to do is tell them to cease existing, go bankrupt, for-the-love-of-God stop helping, and we’ll all save 50% of our money and scarcely have a lower level of service. I mean, you can hardly exceed abominable.
The NYC school system is a great example: something like 66% of students drop out, while many of the remainder are uneducated and illiterate. What possible harm would it be to close the school system and stop paying for it altogether? With rates that bad, basically only the students who would study at home and pass anyway are passing now. Teachers, administration, programs, are therefore measurably providing ZERO benefit over the baseline. So it’s easy to see that we can’t possibly do worse, BUT WE CAN SAVE 100% OF OUR MONEY.
That’s incentive. Especially when most of us haven’t got a nickel to spare. By demanding ALL THE THINGS, they have only destroyed themselves.
Unfortunately, they’ve taken most of us with them.
Just for anecdote, a friend of mine works for a group home. They had a resident with a 105-degree fever who had been to the E.R., but had returned as his heart was racing–a thing easily noticed by pre-nurses and healthcare-oriented staff.
This patient had chest pains as well, and although hard to quantify it was worrisome stuff. So they took him back to the E.R. and waited 2 hours to be seen because there were… wait for it… two patients that evening.
The doctor prescribed Motrin. … I didn’t skip over a part there, the doctor heard the healthcare employee say the patient had chest pains with an irregular heartbeat, refused to hear it, refused to examine, said they’d seen the patient yesterday and they had a cold. Yes, they’d been in already. Because they didn’t diagnose it the first time. The hospital then forgot to fill the prescription Motrin and issued an empty envelope, releasing the patient on a Sunday, presumably to DIE OF HEART ARRHYTHMIA, and/or fever, and/or whatever it was they might have had, which they didn’t know, because they never looked.
If we were in a log cabin, in 1820 Kentucky, and I spent 2 hours walking my sick Pa down to the neighboring cabin and said, “Well Billy-Joe, Pa’s been sick and now his heart sounds funny,” what do you think you would do? You’d probably say, “let me listen and see if you’re right.” We’ve descended below the level of instinctual primate behavior here, and are into some sub-basement reserved for PhD’s.
Doctors and mis-prescriptions are now a leading cause of death–26x more deadly than firearms, 800,000 vs. 30,000/yr.
Death by Medicine (Estimated Annual Mortality and Economic Cost of Medical Intervention)
Granted that as people see doctors when already ill, the numbers are not neatly comparable. However, medicine is considered “safe” or “exemplary”, we are encouraged to use it, while guns are often considered the standard for “unsafe” and “dangerous.” While many would die without medicine, this suggests the baseline is that 800,000/year would be saved by banning medicine altogether. In short: We’re doing it wrong. Considering we pay twice (on a per person basis) what other developed nations pay for care, net-net could we really do much worse by having no doctors or medicine whatsoever?
Not really an unusual case either. They tried to kill someone a few weeks earlier and a different patient that weekend. They have tried to kill family members several times. I’m sure most readers have a similar scare stories. But death by neglect is still fatal, the fault of just not giving a damn.
Surely I exaggerate?
800,000 people were statistically killed via paid-for quack science that incorrectly (and illegally) promoted statins in Europe.
Medicine Or Mass Murder? Guideline Based on Discredited Research May Have Caused 800,000 Deaths In Europe Over The Last 5 Years (Forbes)
The earlier paper demonstrated the potentially large and lethal consequences of the current European Society of Cardiology guideline recommending the liberal use of beta-blockers to protect the heart during surgery for people undergoing non cardiac surgery. There is, it has now become clear, a general lack of concern and response to evidence of scientific fraud and misconduct.
This was quickly followed by a few thousand probable deaths of blood clots due to a newer configuration of the Pill.
(Note that 800 deaths are only the U.K.) –Just two random articles in the last few days, probably hundreds of others with millions of deaths if I looked. The over 60,000 deaths from provably corrupt research authorizing Vioxx comes to mind.
I somehow feel that if I killed 800,000 people through fraud, abuse, or neglect, that the police would be –I don’t know– MAD at me or something. Or killed even one group home patient by refusing to lift a finger. There were once quite a number of laws concerning it: neglect, reckless endangerment, manslaughter–murder even.
But that’s so 20th Century. Consequences, I mean. Laws and enforcing them. Like so many, we’re now considering flying out of the country for healthcare, but unlike so many we don’t have money for 5-star hospital spas in Goa or Singapore. So we were thinking maybe the Belgian Congo for better medical care than rural NY. I hear they may have stethoscopes there.
THAT’S what I mean when I say you could close the whole system and have it be a measurable benefit to mankind.
The problem is its own solution. Whether we try to stop, or let it stop, it WILL stop.Because anything that can’t go on, won’t. When you’re at 100% costs and 0% benefits, congratulations, you’ve reached the Singularity.
Our guest blog today comes from Steve Andrews, who is a retired energy consultant and contributor to the Peak Oil Review, reachable at email@example.com. We reached out to CERA to determine its interest in providing a response, but did not hear back.
“False optimism leads to very poor investment decisions.”: Jeremy Grantham, co-founder and Chief Investment Strategist, GMO
Ten years ago this month the Oil & Gas Journal published a story from CERAWeek—an annual elite conference for the oil industry put on by Cambridge Energy Research Associates—that bears revisiting.
Why go back? Three reasons. First, CERA arguably has maintained the highest profile of any oil industry analytical shop since at least the turn of the century, thanks in large part to founder Daniel Yergin’s reputation. Every time there is a surprise in world oil supply, he’s the media’s go-to guru. When the National Petroleum Council convenes a world oil study, you can bet the ranch that CERA will play a lead role. When the US Senate or House convenes a committee hearing on oil, CERA often sits on the panel; they also deliver some of their key research papers free of charge to all US lawmakers. Their policy-oriented footprint is large and their strategic media outreach effective.
Second, at the time CERA’s 2004 forecast of seven years of history-breaking sustained growth in world oil production capacity struck many players as being an unreasonably if not outrageously optimistic headline. How does it look 10 years later? Way off base.
Third, if CERA’s oil forecast was that off base a decade ago, should we believe the current abundant-oil storyline that CERA jumpstarted in the fall of 2011 and that has been embraced by the press and policy makers alike? So let’s look back.
On CERA’s lead panel in February 2004, Robert W. Esser, senior consultant and director on global oil resources, predicted global oil production capacity would expand by 20 million barrels/day from 2004 through 2010. (CERA doesn’t forecast production. It forecasts production capacity, which is essentially unverifiable.) That’s nearly 3 million b/d of capacity growth every year for seven straight years from 2004 onward. It didn’t happen.
Per data from BP’s Statistical Review of World Energy, actual production of global petroleum liquids grew by 5.7 million b/d during that period. Then consider the 4 million b/d of spare OPEC capacity that the US EIA shows for 2010. But there were also at least 2 million b/d of spare OPEC capacity in January 2004, at the start of the forecast period. So net, CERA missed their forecast by well over two thirds.
Note that by CERA’s definition production capacity “…eliminates economic or political factors and temporary interruptions such as weather or labor strikes.” Note too that unused productive capacity is never intentionally present among non-OPEC nations, and unused and undamaged production capacity among OPEC nations was primarily limited to Saudi Arabia, Kuwait and United Arab Emirates during 2010.
Why did CERA stumble so badly?
First and foremost, CERA underestimated decline rates from existing oil fields. About the time of its 2004 conference, an oil industry analyst who knew Daniel Yergin asked him, during an elevator discussion, what decline rate for producing fields CERA used when calculating growth in world oil supply in their major studies. Mr. Yergin replied that it would be in the 1% to 2% range.
Chalk that up as a fatal flaw. Over seven years, a decline rate of 1.5% would mean having to replace only 8+ mbd of production capacity. It’s ironic that by late 2007, in what CERA called a groundbreaking study, they calculated the actual decline rate from 811 of the world’s major oil fields at 4.5% per year. Over those same 7 years, using their 4.5% decline rate would require 23 million b/d of capacity just to keep production flat. IEA estimates for decline rates rank even higher than CERA’s.
On the production side, CERA spoke optimistically about projected gains from the Gulf of Mexico, West Africa, Brazil, the Caspian area, Canada, Venezuela, Iraq, Nigeria, Algeria, Ecuador, Sudan and Russia. Indeed, production increased in 11 of those 13 nations for a net gain of 6.7 million b/d. But on the bad news front, the rest of the world lost 1 million b/d of oil production during CERA’s forecast period, hence the 5.7 million b/d net gain. Declines badly undercut forecast gains.
On the demand side, CERA actually worried that “should this spurt in output exceed projections of a very large increase in world oil demand this decade, then persistent downward pressure on oil prices might result.” For the record, when CERA made that comment, oil prices were upward of $30. But while nearly everyone was wrong about oil prices a decade ago, CERA was also wrong about the key demand driver: China. CERA forecast that China’s demand growth for oil would slow to 5% in 2004, compared to what eventually occurred: record-breaking growth of nearly 17%. And while CERA talked about volatility in Chinese demand going forward, China’s record-setting growth rate for oil demand continued throughout CERA’s 2004-10 forecast period.
If this was a personal forecast which I had blown this badly (and I’ve blown a couple), no one would notice. But this enormously flawed vision was widely circulated. CERA gets press coverage, but the press isn’t checking CERA’s track record, and this 2004 prediction is just the tip of the iceberg.
In 2005, CERA dialed back their optimism only slightly. They projected world oil supply capacity still growing 16.4 mbd from 2004 through 2010—a reduction of 3.6 mbd from their original forecast. They projected world demand in 2010 at 94 million b/d, leaving 7.5 million b/d of idle capacity. Note this comment about related impacts on prices: “We generally expect supply to further outpace demand growth in the next few years, which could result in oil price weakness around 2007-08 or thereafter.”
In 2006, CERA projected potential world oil capacity growth of 21.3 million b/d—from 88.7 million b/d in 2006 to 110 million b/d in 2015. We’re less than two years away from year-end 2015, yet total petroleum liquids production will likely run in the 90 million b/d range. Clearly, CERA’s was an exceedingly pollyanish view, rather like a best case in a perfect world.
Now square CERA’s long-standing optimism bias on future world oil supplies with the recent spate of sobering news from Wall Street on the financial travails of the large investor-owned super-majors. Mark Lewis has done a nice job highlighting the near tripling of oil and gas capacity expansion costs since 2000—from $250 vs. $700 billion; three quarters of that was spent on oil, yet oil supply rose only a modest 15% (BP data). Increasingly blunt reports from analyst shops like Sanford Bernstein add to the growing contrarian chatter. Solid coverage in the UK of Richard Miller’s recent paper “The Future of World Oil Production” opened a few eyes about limits. But those voices still have a steep hill to climb.
That’s in part because, starting in September 2011, CERA went on the offensive as chief cheerleader of an overly optimistic, US-led oil abundance storyline. It features the US’s record-breaking shale oil bonanza—an amazingly successful yet term-limited reality. Viewed at the global level, for the last few years the brouhaha about our shale oil bonanza has been the tail wagging the world oil supply dialogue.
CERA’s oil supply predictions should have earned deep skepticism from the press and policy makers. That hasn’t happened yet. It’s overdue.
But please keep the larger backdrop in mind: Without a serious revisiting of the questionable optimism that dominates any dialogue related to longer-term world oil supplies, without a harshly realistic scrub of the facts, we face unnecessarily large energy policy risks.
The Economic Collapse
February 19th, 2014
What are we to make of this sudden rash of banker suicides? Does this trail of dead bankers lead somewhere? Or could it be just a coincidence that so many bankers have died in such close proximity? I will be perfectly honest and admit that I do not know what is going on. But there are some common themes that seem to link at least some of these deaths together. First of all, most of these men were in good health and in their prime working years. Secondly, most of these “suicides” seem to have come out of nowhere and were a total surprise to their families. Thirdly, three of the dead bankers worked for JP Morgan. Fourthly, several of these individuals were either involved in foreign exchange trading or the trading of derivatives in some way. So when “a foreign exchange trader” jumped to his death from the top of JP Morgan’s Hong Kong headquarters this morning, that definitely raised my eyebrows. These dead bankers are starting to pile up, and something definitely stinks about this whole thing.
What would cause a young man that is making really good money to jump off of a 30 story building? The following is how the South China Morning Post described the dramatic suicide of 33-year-old Li Jie…
An investment banker at JP Morgan jumped to his death from the roof of the bank’s headquarters in Central yesterday.
Witnesses said the man went to the roof of the 30-storey Chater House in the heart of Hong Kong’s central business district and, despite attempts to talk him down, jumped to his death.
If this was just an isolated incident, nobody would really take notice.
But this is now the 7th suspicious banker death that we have witnessed in just the past few weeks…
– On January 26, former Deutsche Bank executive Broeksmit was found dead at his South Kensington home after police responded to reports of a man found hanging at a house. According to reports, Broeksmit had “close ties to co-chief executive Anshu Jain.”
– Gabriel Magee, a 39-year-old senior manager at JP Morgan’s European headquarters, jumped 500ft from the top of the bank’s headquarters in central London on January 27, landing on an adjacent 9 story roof.
– Mike Dueker, the chief economist at Russell Investments, fell down a 50 foot embankment in what police are describing as a suicide. He was reported missing on January 29 by friends, who said he had been “having problems at work.”
– Richard Talley, 57, founder of American Title Services in Centennial, Colorado, was also found dead earlier this month after apparently shooting himself with a nail gun.
– 37-year-old JP Morgan executive director Ryan Henry Crane died last week.
– Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, although the circumstances surrounding his death are still unknown.
So did all of those men actually kill themselves?
Well, there is reason to believe that at least some of those deaths may not have been suicides after all.
For example, before throwing himself off of JP Morgan’s headquarters in London, Gabriel Magee had actually made plans for later that evening…
There was no indication Magee was going to kill himself at all. In fact, Magee’s girlfriend had received an email from him the night before saying he was finishing up work and would be home soon.
And 57-year-old Richard Talley was found “with eight nail gun wounds to his torso and head” in his own garage.
How in the world was he able to accomplish that?
Like I said, something really stinks about all of this.
Meanwhile, things continue to deteriorate financially around the globe. Just consider some of the things that have happened in the last 48 hours…
-According to the Bangkok Post, people are “stampeding to yank their deposits out of banks” in Thailand right now.
-Venezuela is coming apart at the seams. Just check out the photos in this article.
-The unemployment rate in South Africa is above 24 percent.
-Ukraine is on the verge of total collapse…
Three weeks of uneasy truce between the Ukrainian government and Western-oriented protesters ended Tuesday with an outburst of violence in which at least three people were killed, prompting a warning from authorities of a crackdown to restore order. Protesters outside the Ukrainian parliament hurled broken bricks and Molotov cocktails at police, who responded with stun grenades and rubber bullets.
-This week we learned that the level of bad loans in Spain has risen to a new all-time high of 13.6 percent.
-China is starting to quietly sell off U.S. debt. Already, Chinese U.S. Treasury holdings are down to their lowest level in almost a year.
-During the 4th quarter of 2013, U.S. consumer debt rose at the fastest pace since 2007.
-U.S. homebuilder confidence just experienced the largest one month decline ever recorded.
-George Soros has doubled his bet that the S&P 500 is going to crash. His total bet is now up to about $1,300,000,000.
For many more signs of financial trouble all over the planet, please see my previous article entitled “20 Signs That The Global Economic Crisis Is Starting To Catch Fire“.
Could some of these deaths have something to do with this emerging financial crisis?
That is a very good question.
Once again, I will be the first one to admit that I simply do not know why so many bankers are dying.
But one thing is for certain – dead bankers don’t talk.
Everyone knows that there is a massive amount of corruption in our banking system. If the truth about all of this corruption was to ever actually come out and justice was actually served, we would see a huge wave of very important people go to prison.
In addition, it is an open secret that Wall Street has been transformed into the largest casino in the history of the world over the past several decades. Our big banks have become more reckless than ever, and trillions of dollars are riding on the decisions that are being made every day. In such an environment, it is expected that you will be loyal to the firm that you work for and that you will keep your mouth shut about the secrets that you know.
In the final analysis, there is really not that much difference between how mobsters operate and how Wall Street operates.
If you cross the line, you may end up paying a very great price.
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