Oil plummets 30% as OPEC deal failure sparks price war fears(cnbc.com)
cnbc.com
Oil plummets 30% as OPEC deal failure sparks price war fears
https://www.cnbc.com/2020/03/08/oil-plummets-30percent-as-opec-deal-failure-sparks-price-war-fears.html
190 comments
Too bad ndp got voted out. Too bad Klein didnt maintain the heritage fund...
Realistically time to diversify was at least 10 years ago
Realistically time to diversify was at least 10 years ago
Agreed. If the Klein government had put a serious amount of effort into not being reliant upon one resource around... 2004 or so, this could have been alleviated. Now they're run by Jason Kenney, who is almost as far-right of a politician as it's possible to find anywhere in the confederation.
what are you talking about? we all got rich from all that Klein Money in 2008. still reverberating in the economy as we collectively decided not to buy booze and steak and instead invested them all /s
The most adorable part is I remember the era of, "A Tim Horton's employee in Alberta gets paid HOW MUCH ?!" And now I'm living through the super butt hurt whining about an Alberta Brexit because they're not getting enough of a break by the federal government.
maybe if it wasn't all spent on jacked-up F-350 pickup trucks, overly expensive large houses, snowmobiles and toys...
Beat me to it. I recall CBC articles about all of the abandoned trucks at the Edmonton and Calgary airports as oil workers decided to split.
https://www.cbc.ca/news/canada/edmonton/edmonton-internation...
https://www.cbc.ca/news/canada/edmonton/edmonton-internation...
When I stated something very similar to a friend from Alberta, he said very confidently that the province has a very well diversified economy. I can hardly believe that, but he's a highly intelligent individual and I didn't have the numbers to argue otherwise, so I let it stand without a further challenge. Since you seem to agree with my point of view on this, would you mind elaborating on how you would show that diversification was needed decades ago?
For reference: Alberta's economy by industry:
https://economicdashboard.alberta.ca/GrossDomesticProduct#ty...
Based on rgbrenner's link oil and gas make up a little over a quarter of Alberta's GDP
Can't they just pump up house prices and the FIRE economy even more?
I live in Edmonton and it's a buyers market. This ain't Vancouver
I’m sure Kenney will sort it out. More budget cuts for Alberta!
At least we have a well funded health care system in the midst of COVID-19, with both doctors and nurses drawn to Alberta by the budget cuts and contract renegotiation by the provincial government.
Is this a joke? Kenney is doing everything he can to cut healthcare. He cited a NHS study -- that's British healthcare -- of hospital use cots as a justification for cutting support of things like hernia surgeries or women getting their tubes tied.[1]
I supremely doubt more doctors and nurses are coming to Alberta because of budget cuts as well. Were that the case the US State of Oklahoma or Kansas would have the best doctors in the US.
[1] https://edmontonjournal.com/news/politics/ahs-review-recomme...
I supremely doubt more doctors and nurses are coming to Alberta because of budget cuts as well. Were that the case the US State of Oklahoma or Kansas would have the best doctors in the US.
[1] https://edmontonjournal.com/news/politics/ahs-review-recomme...
It reads like a joke, yes.
The time to diversify was the 70s, when the wealth first started coming in and before conventional oil dried up. The boom and bust thing happened all through the 80s. My dad was a machinist and spent much of the 80s and 90s unemployed, every time the price of oil dropped again.
Albertans seem to have a short memory, though. What is happening now is nothing new, but there's so much ridiculous finger pointing, as if somehow it's the rest of Canada's fault.
I'm glad I left the province 20 years ago. I miss aspects of Edmonton, and family, but the political atmosphere in the province is extremely frustrating.
Albertans seem to have a short memory, though. What is happening now is nothing new, but there's so much ridiculous finger pointing, as if somehow it's the rest of Canada's fault.
I'm glad I left the province 20 years ago. I miss aspects of Edmonton, and family, but the political atmosphere in the province is extremely frustrating.
USDCAD is not looking too healthy.
The vast contradictions in the world of countries with a lot of natural resources is both enlightening and depressing.
At one end of the spectrum is Norway, who decided not to sell resource rights for peanuts so some shareholders somewhere can get rich, ironically it seems somewhat thanks to an Iraqi [1]. Essentially most of the profits from oil revenues are retained by the government.
At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
The sad part here is that those people who have essentially been swindled have succumbed willingly essentially in the name of religion. Their leaders are keeping the faith.
So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was. What, really, do any Middle Eastern countries have to show for this massive windfall?
It gets sadder when you realize that a certain amount has to be diverted to the populace essentially to keep them placated. The cost of extraction is going up. This money staving off revolution is going up.
So what you have is where these countries now can't afford to turn off the supply like they did in the 1970s. Now, Russia, Venezuela, Norway and the USA are huge producers (and net exporters). Solar in particular will continue to bite into oil demand so long term the situation doesn't look great for oil yet those countries that didn't spend their windfalls wisely are facing a harsh future.
[1]: https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
At one end of the spectrum is Norway, who decided not to sell resource rights for peanuts so some shareholders somewhere can get rich, ironically it seems somewhat thanks to an Iraqi [1]. Essentially most of the profits from oil revenues are retained by the government.
At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
The sad part here is that those people who have essentially been swindled have succumbed willingly essentially in the name of religion. Their leaders are keeping the faith.
So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was. What, really, do any Middle Eastern countries have to show for this massive windfall?
It gets sadder when you realize that a certain amount has to be diverted to the populace essentially to keep them placated. The cost of extraction is going up. This money staving off revolution is going up.
So what you have is where these countries now can't afford to turn off the supply like they did in the 1970s. Now, Russia, Venezuela, Norway and the USA are huge producers (and net exporters). Solar in particular will continue to bite into oil demand so long term the situation doesn't look great for oil yet those countries that didn't spend their windfalls wisely are facing a harsh future.
[1]: https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
> At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
Iran nationalized their oil industry, and they got a CIA-backed coup for their troubles.
Iran nationalized their oil industry, and they got a CIA-backed coup for their troubles.
Allende did the same in Chile with the copper mines and CIA delivered the same medicine in kind.
Chile's story is a strange duality of murder and relative economic prosperity. It is extremely difficult to say whether it was "worth it".
But, the most important thing is that we say it happened, just like you did.
Chile's story is a strange duality of murder and relative economic prosperity. It is extremely difficult to say whether it was "worth it".
But, the most important thing is that we say it happened, just like you did.
The Pinochet "economic miracle" is largely debunked at this point. Naomi Klein has covered this topic extensively in her book, The Shock Doctrine. Here's a relevant passage from her book:
“The only thing that protected Chile from complete economic collapse in the early eighties was that Pinochet had never privatized Codelco, the state copper mine company nationalized by Allende. That one company generated 85 percent of Chile’s export revenues, which meant that when the financial bubble burst, the state still had a steady source of funds…. By 1988, when the economy had stabilized and was growing rapidly, 45 percent of the population had fallen below the poverty line. The richest 10 percent of Chileans, however, had seen their incomes increase by 83 percent. Even in 2007, Chile remained one of the most unequal societies in the world—out of 123 countries in which the United Nations tracks inequality, Chile ranked 116th, making it the eighth most unequal country on the list.”
You can read her go deeper into this subject in her 2008 blog post here: https://naomiklein.org/response-attacks/
The economy under Pinochet was actually quite mediocre:
"By the end of the dictatorship, Chile's average real per capita GDP had grown by only 1.6% per year, a result very close to economic stagnation; 18% of the population was unemployed and 45% below the poverty line. In 1990, Chile’s average GDP per capita, calculated on the basis of purchasing power parity, was only US $4,590, lower than Brazil’s, which at that time, after the “lost decade” of the 1980s, was $6,680. To define this as a "success" is, to say the least, intellectual impudence, if not contemptuous ideological propaganda."
Taken from here: https://www.opendemocracy.net/en/democraciaabierta/myths-abo...
“The only thing that protected Chile from complete economic collapse in the early eighties was that Pinochet had never privatized Codelco, the state copper mine company nationalized by Allende. That one company generated 85 percent of Chile’s export revenues, which meant that when the financial bubble burst, the state still had a steady source of funds…. By 1988, when the economy had stabilized and was growing rapidly, 45 percent of the population had fallen below the poverty line. The richest 10 percent of Chileans, however, had seen their incomes increase by 83 percent. Even in 2007, Chile remained one of the most unequal societies in the world—out of 123 countries in which the United Nations tracks inequality, Chile ranked 116th, making it the eighth most unequal country on the list.”
You can read her go deeper into this subject in her 2008 blog post here: https://naomiklein.org/response-attacks/
The economy under Pinochet was actually quite mediocre:
"By the end of the dictatorship, Chile's average real per capita GDP had grown by only 1.6% per year, a result very close to economic stagnation; 18% of the population was unemployed and 45% below the poverty line. In 1990, Chile’s average GDP per capita, calculated on the basis of purchasing power parity, was only US $4,590, lower than Brazil’s, which at that time, after the “lost decade” of the 1980s, was $6,680. To define this as a "success" is, to say the least, intellectual impudence, if not contemptuous ideological propaganda."
Taken from here: https://www.opendemocracy.net/en/democraciaabierta/myths-abo...
> Naomi Klein has covered this topic extensively in her book, The Shock Doctrine.
Naomi Klein is a incredibly left wing journalist who's conclusion had all already been made before she did the research. I would argue that much of her book is incredibly badly research and bordering on straight up conspiracy theory nonsense. Her book is absolutely not up to any standard of economic or any social science resource.
It is true that Pinochet did not produce some kind of economic miracle. That part is mostly correct.
However one can also argue that the alternative path Allende wanted to go down was incredibly unlike to produce even those results.
Because of how Pinochet was was removed, helped Chile on a different path that was good for it, even if many people still don't like it.
All that said, I'm against US intervention in other countries.
Naomi Klein is a incredibly left wing journalist who's conclusion had all already been made before she did the research. I would argue that much of her book is incredibly badly research and bordering on straight up conspiracy theory nonsense. Her book is absolutely not up to any standard of economic or any social science resource.
It is true that Pinochet did not produce some kind of economic miracle. That part is mostly correct.
However one can also argue that the alternative path Allende wanted to go down was incredibly unlike to produce even those results.
Because of how Pinochet was was removed, helped Chile on a different path that was good for it, even if many people still don't like it.
All that said, I'm against US intervention in other countries.
there is so many things wrong with this comment that i don't really know where to start...
The shock doctrine is really intersecting book and as far as remember 1/4 of it is just references and links to points she is making or stories she describes
As oppose to your 'leveled unbiased opinion', as its just that - an opinion unsupported by a single fact.
The shock doctrine is really intersecting book and as far as remember 1/4 of it is just references and links to points she is making or stories she describes
As oppose to your 'leveled unbiased opinion', as its just that - an opinion unsupported by a single fact.
Here book was tailor made to be a mass market seller for left leaning semi-educated audience. And in that market it was incredibly successful. And the book is absolutely full of conspiracy theory level accusation about economists and their influence on global foreign policy, and finding references to people who support your opinion isn't exactly hard to find.
My opinion is not unbias, as is nobodies, and I agree with one of the main points, that there was no economic miracle. However taking the whole book at face value will give you a totally distorted one-sided view of the topics.
You might as well read a book by Bill O'Reilly and claim its a balanced an accurate representation on the topics. But of course only Republican journalists are bias.
My opinion is not unbias, as is nobodies, and I agree with one of the main points, that there was no economic miracle. However taking the whole book at face value will give you a totally distorted one-sided view of the topics.
You might as well read a book by Bill O'Reilly and claim its a balanced an accurate representation on the topics. But of course only Republican journalists are bias.
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Don't forget bolivia last year. The first native american president got ousted by a international bankers/cia led coup. And of course, the coming overthrow of venezuela in the coming months led by the same culprits.
Happily, it seems their efforts have failed in Venezuela, in vaguely humorous fashion. Juan Guaidó no longer holds any elected office, although he has enjoyed the hundreds of millions of dollars he has received from CIA. (USA taxpayers will put up with literally anything.) There was just a hung jury on the embassy protectors persecution. Hausmann can't figure out whether he is a professor or an IDB rep. Good times!
I still hold out some hope for Bolivia. Of course it's tragic that the new "Christian" coup government has harmed so many indigenous people. In doing so, however, they may have overplayed their hands. Indigenous and unionists aren't knuckling under. There are some inland areas the police and military no longer dare to tread. The coup government that CIA picked out in Bolivia are nearly as hapless as Guaidó and his gang. It will be interesting to see whether Bolivia appears on the popular news in USA once in 2020...
I still hold out some hope for Bolivia. Of course it's tragic that the new "Christian" coup government has harmed so many indigenous people. In doing so, however, they may have overplayed their hands. Indigenous and unionists aren't knuckling under. There are some inland areas the police and military no longer dare to tread. The coup government that CIA picked out in Bolivia are nearly as hapless as Guaidó and his gang. It will be interesting to see whether Bolivia appears on the popular news in USA once in 2020...
Evo had a parallel election office set up to manipulate the results of the election. And before you link the recent "MIT study", yeah please don't. That was paid by Mark Weisbrot, a Hugo Chavez paid shill.
The level of ruin the bolivarian revolution has brought to my country with the help of Cuba is just appalling. At this point we need all the help available, it's been 20 years already of mismanagement and corruption at levels never before seen in the region.
The level of ruin the bolivarian revolution has brought to my country with the help of Cuba is just appalling. At this point we need all the help available, it's been 20 years already of mismanagement and corruption at levels never before seen in the region.
Bolivia's GDP has more than doubled in that time period.
> Happily, it seems their efforts have failed in Venezuela, in vaguely humorous fashion
I think you are underestimating the international bankers' power and resolve. Guaido was a special guest at the state of the union address and both parties along with trump praised him and gave him a standing ovation. Something like that doesn't happen unless a coup in venezuela is pre-ordianed. It also shows that politics and the divisive theatrics are just for show. They are distractions to dupe the american people. Both parties and trump serve the same international banking masters, not the american people.
> It will be interesting to see whether Bolivia appears on the popular news in USA once in 2020...
It won't.
What's interesting is the sudden rise of the pro-coup messaging on social media and of the course the odd downvoting of comments pointing out the coups. I guess the bankers' weren't happy just buying nytimes op-eds. Now they are trying to buy social media influence.
https://www.nytimes.com/2019/04/01/opinion/contributors/vene...
Joanna Hausmann is a daughter of a "venezuelan" banker who got ousted by venezuelans. She is a youtuber "comedian" and I guess that is good enough to get an op-ed piece on the nytimes about a major geo-politic issue. But then again, the nytimes was created by a banker...
I think you are underestimating the international bankers' power and resolve. Guaido was a special guest at the state of the union address and both parties along with trump praised him and gave him a standing ovation. Something like that doesn't happen unless a coup in venezuela is pre-ordianed. It also shows that politics and the divisive theatrics are just for show. They are distractions to dupe the american people. Both parties and trump serve the same international banking masters, not the american people.
> It will be interesting to see whether Bolivia appears on the popular news in USA once in 2020...
It won't.
What's interesting is the sudden rise of the pro-coup messaging on social media and of the course the odd downvoting of comments pointing out the coups. I guess the bankers' weren't happy just buying nytimes op-eds. Now they are trying to buy social media influence.
https://www.nytimes.com/2019/04/01/opinion/contributors/vene...
Joanna Hausmann is a daughter of a "venezuelan" banker who got ousted by venezuelans. She is a youtuber "comedian" and I guess that is good enough to get an op-ed piece on the nytimes about a major geo-politic issue. But then again, the nytimes was created by a banker...
Sure, the coup is preordained, but it has been for so long it's starting to smell a bit stale. Gargamel has been hanging around for over a year now. I always suspected he was the sort of loser one appoints when one sort of wants the whole project to fizzle out ignominiously. What's the old saw? Something about "B-level people hire C-level people"? The elected government of Venezuela has been careful to let Guaidó run amok without arresting him or hampering his travel. Now that his erstwhile allies have realized he isn't going to an martyr anytime soon, they're less interested.
CIA themselves are on shakier ground than they used to be. They expected to be ordering Pres. Pence around by now. Now the "grown-up" Democrats have "chosen" Biden (as I predicted in 2017), with whom Trump will play as a cat torments a mouse. Say what you will about his speed habit, at least the Cheeto isn't already sundowning halfway through the afternoon. After he wins this year, Trump will be far more interested in shuttering CIA than in tolerating their further misadventures abroad.
Above, I was actually referring to Hausmann père, not Hausmann fille. The Hausmann (what a traditional Venezuelan name!) family run sort of a low-rent one-stop yes-we'll-take-black-budget-funds shop. Prof. Hausmann is at the K-school, which I guess explains why he didn't actually stop working for Guaidó when he promised Harvard administration he would. He's hoping to land at CFR...
CIA themselves are on shakier ground than they used to be. They expected to be ordering Pres. Pence around by now. Now the "grown-up" Democrats have "chosen" Biden (as I predicted in 2017), with whom Trump will play as a cat torments a mouse. Say what you will about his speed habit, at least the Cheeto isn't already sundowning halfway through the afternoon. After he wins this year, Trump will be far more interested in shuttering CIA than in tolerating their further misadventures abroad.
Above, I was actually referring to Hausmann père, not Hausmann fille. The Hausmann (what a traditional Venezuelan name!) family run sort of a low-rent one-stop yes-we'll-take-black-budget-funds shop. Prof. Hausmann is at the K-school, which I guess explains why he didn't actually stop working for Guaidó when he promised Harvard administration he would. He's hoping to land at CFR...
As most people do who talk about this online, you neglect to mention that in the lead up to the coup, Mossadegh was constitutionally dismissed and yet tried to hold onto power. Doesn't that make him the attempted usurper? It's not like the US put their own figurehead in government after the coup. They just gave it back to the person who was literally the head of the recognized state.
https://en.m.wikipedia.org/wiki/1953_Iranian_coup_d%27état
> On Saturday 15 August, Colonel Nematollah Nassiri,[14] the commander of the Imperial Guard, delivered to Mosaddegh a firman from the Shah dismissing him. Mosaddegh, who had been warned of the plot, probably by the Communist Tudeh Party, rejected the firman and had Nassiri arrested.[53][54][55] Mosaddegh argued at his trial after the coup that under the Iranian constitutional monarchy, the Shah had no constitutional right to issue an order for the elected Prime Minister's dismissal without Parliament's consent. However, the constitution at the time did allow for such an action, which Mosaddegh considered unfair.
"The laws not fair! I wanted to be a dictator but it wouldn't let me"
https://en.m.wikipedia.org/wiki/1953_Iranian_coup_d%27état
> On Saturday 15 August, Colonel Nematollah Nassiri,[14] the commander of the Imperial Guard, delivered to Mosaddegh a firman from the Shah dismissing him. Mosaddegh, who had been warned of the plot, probably by the Communist Tudeh Party, rejected the firman and had Nassiri arrested.[53][54][55] Mosaddegh argued at his trial after the coup that under the Iranian constitutional monarchy, the Shah had no constitutional right to issue an order for the elected Prime Minister's dismissal without Parliament's consent. However, the constitution at the time did allow for such an action, which Mosaddegh considered unfair.
"The laws not fair! I wanted to be a dictator but it wouldn't let me"
>"The laws not fair! I wanted to be a dictator but it wouldn't let me"
At worst you can say he wanted to be dictator but the dictator wouldn't let him, but arguing that somehow Mosaddegh is the bad guy for resisting such an obvious power grab is ridiculous. Being constitutional doesn't excuse a coup.
At worst you can say he wanted to be dictator but the dictator wouldn't let him, but arguing that somehow Mosaddegh is the bad guy for resisting such an obvious power grab is ridiculous. Being constitutional doesn't excuse a coup.
Mossadegh was the one who grabbed power, by not following a constitutional order.
This line of thinking might work if there hadn't been a coup by the Shah shortly after this incident. It's clear the Shah was aiming to be dictator, whether he could find a constitutional justification for it or not.
because there are literally declassified docs that show the point was the oil and not "democracy". this is like saying the american civil war was about states rights. it's called a pretext and if it weren't for declassified docs in this case (and secessionist writing in the other case) we'd never hear the end of it (but since all that documentation does exist, it can in fact be neglected)
Declassified Documents Reveal CIA Role In 1953 Iranian Coup : NPR https://www.npr.org/2013/09/01/217976304/declassified-docume...
For the last time, the American Civil War was not about states’ rights — Quartz https://qz.com/378533/for-the-last-time-the-american-civil-w...
Declassified Documents Reveal CIA Role In 1953 Iranian Coup : NPR https://www.npr.org/2013/09/01/217976304/declassified-docume...
For the last time, the American Civil War was not about states’ rights — Quartz https://qz.com/378533/for-the-last-time-the-american-civil-w...
It's pretty shabby to argue in support of monarchy. It's much worse when the monarch in question is a wholly-owned asset of foreign spies and oil tycoons.
That is an astoundingly selective reading of the article you linked...
Is it more or less selective than OP who apparently thinks that the only reason for the coup was because Iran nationalized their oil industry?
Historical revisionism - Wikipedia
https://en.m.wikipedia.org/wiki/Historical_revisionism
>In historiography, the term historical revisionism identifies the re-interpretation of the historical record. It usually means challenging the orthodox (established, accepted or traditional) views held by professional scholars about a historical event, introducing contrary evidence, or reinterpreting the motivations and decisions of the people involved.
>In historiography, the term historical revisionism identifies the re-interpretation of the historical record. It usually means challenging the orthodox (established, accepted or traditional) views held by professional scholars about a historical event, introducing contrary evidence, or reinterpreting the motivations and decisions of the people involved.
[deleted]
I wondered how Mexico nationalized it's oil industry and found out what happened was they nationalized in 1938. Before the oil companies and wall street could really move against them WWII started and the issue became moot.
Typical resource curse. Corruption to the max (African countries with diamonds, every non-western country with oil).
Venezuela also nationalised their oil industry with Chavez but they were already in a very weak spot and of course not a nuclear power (or close to being one). Oil price dropping was the huff&puff that brought the house down.
Venezuela also nationalised their oil industry with Chavez but they were already in a very weak spot and of course not a nuclear power (or close to being one). Oil price dropping was the huff&puff that brought the house down.
Corruption is common in every country, some countries are just better at propaganda.
Have you seen the film “There will be blood”? While not biographical, the gist is people were and are willing to do what it takes to “win”.
Have you seen the film “There will be blood”? While not biographical, the gist is people were and are willing to do what it takes to “win”.
In the US I have gotten or been part of getting a driver's license, building permits, government jobs, and government contracts and have never paid a bribe, been offered one, or seen someone else do so except in a newspaper story.
I don't know if the cynicism is warranted or helpful really. Of course every country has bad actors and every system has problems but there are real differences and improvements possible.
I don't know if the cynicism is warranted or helpful really. Of course every country has bad actors and every system has problems but there are real differences and improvements possible.
This is a terrible anecdote. I'm brazillian, and my country is factually one of the most corrupt in the world, and I have done all of this things (in fact I work in government), and have never paid or seen or even heard of anyone paying a bribe (other than in the news, like you).
People have a very bad idea of what corruption actually is. Low level bribes don't really make a difference anywhere. What really matters is corruption at the highest levels, that change how the whole economy works, and these you only hear when the (proverbial) dam breaks.
People have a very bad idea of what corruption actually is. Low level bribes don't really make a difference anywhere. What really matters is corruption at the highest levels, that change how the whole economy works, and these you only hear when the (proverbial) dam breaks.
In low corruption countries there is corruption but at a larger scale at a higher level as few people would want to risk it unless we are talking millions. Or it's legalised like in the us in the name of political donations. These same Western companies pay bribes and do corruption in the third world and are even protected by their governments.
In the US corruption happens at the very high level, where it's hard to be seen. One tiny example is the murder of Epstein.
Also, US simply made significant portion of corruption legal by calling it lobbying. In all the other countries it's a corruption, but not in US because they simply renamed it.
Also, US simply made significant portion of corruption legal by calling it lobbying. In all the other countries it's a corruption, but not in US because they simply renamed it.
> One tiny example is the murder of Epstein.
Really interesting one because it drifted from being the most likely theory to a "conspiracy theory" pretty rapidly. Once Barr said he was going to get the bottom of it, the media coverage mostly dried up.
Really interesting one because it drifted from being the most likely theory to a "conspiracy theory" pretty rapidly. Once Barr said he was going to get the bottom of it, the media coverage mostly dried up.
> US simply made significant portion of corruption legal by calling it lobbying
Lobbying is legal in every free country on earth. What specifically are you referring to?
Lobbying is legal in every free country on earth. What specifically are you referring to?
The difference is US or Western countries are already mature. I am sure different types of corruption existed there in 19th century when the country was still expanding.
Off course culture of people matter but systemic rot arises when existing people work in what essentially is sometimes a negative sum game. Fights between heterogeneous groups over limited resources exist and far too often much powerful foreign powers do interfere to make the best of the situation for themselves.
Off course culture of people matter but systemic rot arises when existing people work in what essentially is sometimes a negative sum game. Fights between heterogeneous groups over limited resources exist and far too often much powerful foreign powers do interfere to make the best of the situation for themselves.
Lobbying Congress.
Do you vote in elections? Why? Your options(tm) have been pre-purposed so nothing you do matters.
This is the highest form of corruption.
Do you vote in elections? Why? Your options(tm) have been pre-purposed so nothing you do matters.
This is the highest form of corruption.
You can work with the parties or vote at a local level. At the national level your vote feels infinitesimal because it is. You get 1 300 millionth a say in who the next President is, for example.
That's not really corruption so much as it is not having much of a say in who the national leaders are. As the other comment mentioned, corruption is more like having to pay bribes to the police at traffic stops, bribes to get government services, etc.
In some countries, if I were stopped by the police I'd fully expect and try to "Can I pay the fine here?" In the US I'd fully expect that trying to do so would get me worse legal trouble.
Corruption is world wide, no doubt, but it doesn't occur with the same frequency worldwide.
That's not really corruption so much as it is not having much of a say in who the national leaders are. As the other comment mentioned, corruption is more like having to pay bribes to the police at traffic stops, bribes to get government services, etc.
In some countries, if I were stopped by the police I'd fully expect and try to "Can I pay the fine here?" In the US I'd fully expect that trying to do so would get me worse legal trouble.
Corruption is world wide, no doubt, but it doesn't occur with the same frequency worldwide.
Think bigger than what you see on the news please.
What you're describing is low level corruption. Now consider how many construction projects and government services are being 'outsourced' or 'privatized' and take wild guess how much money is ending up in the wrong pockets at that game. Not to mention the lack of quality control and general oversight that often comes along with it.
That's much worse than some traffic cops taking a cut or bribe. Which is also bad. But first the major corruption should be dealt with.
What you're describing is low level corruption. Now consider how many construction projects and government services are being 'outsourced' or 'privatized' and take wild guess how much money is ending up in the wrong pockets at that game. Not to mention the lack of quality control and general oversight that often comes along with it.
That's much worse than some traffic cops taking a cut or bribe. Which is also bad. But first the major corruption should be dealt with.
I wish my vote was 1 out or 300 million at a federal level. Due to the electoral college my vote in California is worth 1/3rd what someone in Wyoming's is worth.
In the US, corruption is centralized and explicitly legal, so not labeled corruption. It's conducted wholesale, not retail as in less organized countries. Individual functionaries would be in competition, so any such activity is crushed ruthlessly where it appears. Meanwhile, bribing politicians pays 1000x+, and automated "trading" produces billionaires. The resentment that drove populism is well-founded, but (cleverly) misdirected.
Venezuela nationalised its oil industry in 1976 (Carlos Andrés 1st term)
> What, really, do any Middle Eastern countries have to show for this massive windfall?
https://stepfeed.com/these-old-photos-of-dubai-show-how-much...
https://stepfeed.com/these-old-photos-of-dubai-show-how-much...
"At one end of the spectrum is Norway, who decided not to sell resource rights for peanuts... At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families"
Note that while in resource effect they are the opposite, in terms of resource exploitation structure they are close.
Both cases nationalized their oil production - yeah, some ME states had a Western monopoly first, but that was decades ago. For the last 30 years, nearly all ME countries have nationalized their production.
The difference has more to do with governance structures, industrialization (Norway already had industry when oil was discovered) and resource curse.
Note that while in resource effect they are the opposite, in terms of resource exploitation structure they are close.
Both cases nationalized their oil production - yeah, some ME states had a Western monopoly first, but that was decades ago. For the last 30 years, nearly all ME countries have nationalized their production.
The difference has more to do with governance structures, industrialization (Norway already had industry when oil was discovered) and resource curse.
"At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people."
An exclusive political and economic system is always stifling towards those excluded. I would turn this discussion a bit around, that having natural resources is irrelevant to the well being of the people if the political and economic institutions are not inclusive. And for inclusive states natural resources likely should contribute only a portion of GDP with healthy investments in other sectors as well.
All the diamonds and gold in the world is irrelevant to the wellbeing of the common people if they are repressed... And if they are not repressed, the relative value of such resources is diminished as other economic activity should be available as well, then.
An exclusive political and economic system is always stifling towards those excluded. I would turn this discussion a bit around, that having natural resources is irrelevant to the well being of the people if the political and economic institutions are not inclusive. And for inclusive states natural resources likely should contribute only a portion of GDP with healthy investments in other sectors as well.
All the diamonds and gold in the world is irrelevant to the wellbeing of the common people if they are repressed... And if they are not repressed, the relative value of such resources is diminished as other economic activity should be available as well, then.
> All the diamonds and gold in the world is irrelevant to the wellbeing of the common people if they are repressed... And if they are not repressed, the relative value of such resources is diminished as other economic activity should be available as well, then.
You are leaving out the fact that a lot of natural resources is a huge incentive for someone to try to repress a population.
You are leaving out the fact that a lot of natural resources is a huge incentive for someone to try to repress a population.
Sure, you need something with a capital output to create an imbalance of wealth. But usually the capital output of any society is sufficient to incentivise exclusivity and repression. Even humans just surviving generally create a capital surplus - and no matter how small - taking that is sufficient to make few individuals wealthy.
> At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
1- UAE seems to be doing well. Dubai has diversified beyond oil mainly as a finance (money laundering?) and transportation hub.
2- Kuwait has KIA which seems similar to the Norway model: https://en.wikipedia.org/wiki/Kuwait_Investment_Authority and it has considerable market cap.
3- Qatar invested heavily on local infrastructure. They have world class universities, a new extensive metro system, an excellent airport, and well maintained roads.
Sure there are some failed examples: Saudi Arabia could have been much better especially that they make lots of money from religious tourism. Libya could have been another Qatar. Iraq could have been at least stable. So...
1- UAE seems to be doing well. Dubai has diversified beyond oil mainly as a finance (money laundering?) and transportation hub.
2- Kuwait has KIA which seems similar to the Norway model: https://en.wikipedia.org/wiki/Kuwait_Investment_Authority and it has considerable market cap.
3- Qatar invested heavily on local infrastructure. They have world class universities, a new extensive metro system, an excellent airport, and well maintained roads.
Sure there are some failed examples: Saudi Arabia could have been much better especially that they make lots of money from religious tourism. Libya could have been another Qatar. Iraq could have been at least stable. So...
Iraq had a decent human development index before Gulf Wars 1 & 2, and the intervening sanctions. (I don't want to downplay the brutality of Hussein's regime, guilty of some genocides, but.)
This is very ignorant. Norway’s model was taken from Kuwait (https://en.m.wikipedia.org/wiki/Kuwait_Investment_Authority)
It isn’t a coincidence that an Iraqi advised them. He saw the model in Kuwait.
It isn’t a coincidence that an Iraqi advised them. He saw the model in Kuwait.
Venezuelan oil exports have collapsed due to a mix of foreign sanctions, corruption, and government incompetence.
And low quality crude means they can't afford to pull it out of the ground when prices are low.
Yes, Venezuela managed to put themselves into a corner. Russia has been saving billions in foreign currency for "a rainy day". Venezuela didn't have the discipline of Russia and of course doesn't have the military might either.
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This analysis seems superficial and xenophobic. I doubt it'll get many down votes on HN because pro Nordic and European statements rarely get much criticism, neither do infantalizing statements about people who practice a religion, but it's none the less fairly exemplary of an increasingly common western attitude that simultaneously promotes a shallow understanding of other cultures while simultaneously pretending to be enlightened because it's arguing in favor of 'the people'.
≥At one end of the spectrum is Norway, who decided not to sell resource rights for peanuts so some shareholders somewhere can get rich, ironically it seems somewhat thanks to an Iraqi [1]. Essentially most of the profits from oil revenues are retained by the government.
Conflicts with...
≥At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
These are both examples of government ownership of the resources. Humanitarian differences don't magically make one government owned and not the other.
≥The sad part here is that those people who have essentially been swindled have succumbed willingly essentially in the name of religion. Their leaders are keeping the faith.
>So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was.
This is theological bigotry plain and simple yet I never see it called out in tech forums when politics comes up. The idea that people in Saudi Arabia, Iran, or anywhere else in the Middle East, are simply too blinded by their traditions to ascend towards a way of life resembling what we westerners have is outright ignorant and devalues the very real social movements that happen in these regions.
And even if you do believe that the theocratic leanings of the region's social movements and policy makers are detrimental with regard to distributing economic gains back to the people, so what? These broad generalizations about faith add nothing useful to the dialogue as far as coming up with solutions. It might shock some people to realize that it's possible to tackle economic development and social wellbeing without demonizing cultural keystones. I'd even go so far as to argue that this sort of theological shaming is actually toxic towards generating solutions because it promotes a narrative that there won't be progress until they give up on their misguided ways.
≥It gets sadder when you realize that a certain amount has to be diverted to the populace essentially to keep them placated. The cost of extraction is going up. This money staving off revolution is going up.
Again, this sort of description only promotes a narrative where these people are misguided infants, prisoners shackled in allegorical caves by their leaders, who can't see the raw deal they've been dealt. These people aren't stupid, they are aware that their governments are often self serving in the same way that Chinese and Russian people know their governments aren't as perfect as they pretend to be. But again, so what? People have to play the hands they're dealt and some even take pride in certain aspects of that hand. These surface level criticisms only sound compelling to western audiences because most of us have no real awareness of the street level politics in these regions and therefore no idea what social action or change even looks like.
>So what you have is where these countries now can't afford to turn off the supply like they did in the 1970s. Now, Russia, Venezuela, Norway and the USA are huge producers (and net exporters). Solar in particular will continue to bite into oil demand so long term the situation doesn't look great for oil yet those countries that didn't spend their windfalls wisely are facing a harsh future.
This is a valid economic criticism for which belittling these people's faith served no point. Sure, cultural factors can accelerate innovation and financial growth. That doesn't immediately indicate that the problem is theocratic. Industry isn't a culture, it's a combination of skill sets and infrastructure. China is the world's second largest economy and has become one of the few nations considered able to pose a growing risk to America's military hegemony, Europe can't even make that claim despite having vastly more in common with the US culturally.
The penultimate point being, it's shallow and easy to make hand gesture arguments when the only people in the conversation are equally distant from the realities being discussed. That doesn't mean we have no responsibility to at least try not to be intolerant, if anything it's when our audience largely agrees with us that we have a greater responsibility to be interpretive and self critical.
≥At one end of the spectrum is Norway, who decided not to sell resource rights for peanuts so some shareholders somewhere can get rich, ironically it seems somewhat thanks to an Iraqi [1]. Essentially most of the profits from oil revenues are retained by the government.
Conflicts with...
≥At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
These are both examples of government ownership of the resources. Humanitarian differences don't magically make one government owned and not the other.
≥The sad part here is that those people who have essentially been swindled have succumbed willingly essentially in the name of religion. Their leaders are keeping the faith.
>So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was.
This is theological bigotry plain and simple yet I never see it called out in tech forums when politics comes up. The idea that people in Saudi Arabia, Iran, or anywhere else in the Middle East, are simply too blinded by their traditions to ascend towards a way of life resembling what we westerners have is outright ignorant and devalues the very real social movements that happen in these regions.
And even if you do believe that the theocratic leanings of the region's social movements and policy makers are detrimental with regard to distributing economic gains back to the people, so what? These broad generalizations about faith add nothing useful to the dialogue as far as coming up with solutions. It might shock some people to realize that it's possible to tackle economic development and social wellbeing without demonizing cultural keystones. I'd even go so far as to argue that this sort of theological shaming is actually toxic towards generating solutions because it promotes a narrative that there won't be progress until they give up on their misguided ways.
≥It gets sadder when you realize that a certain amount has to be diverted to the populace essentially to keep them placated. The cost of extraction is going up. This money staving off revolution is going up.
Again, this sort of description only promotes a narrative where these people are misguided infants, prisoners shackled in allegorical caves by their leaders, who can't see the raw deal they've been dealt. These people aren't stupid, they are aware that their governments are often self serving in the same way that Chinese and Russian people know their governments aren't as perfect as they pretend to be. But again, so what? People have to play the hands they're dealt and some even take pride in certain aspects of that hand. These surface level criticisms only sound compelling to western audiences because most of us have no real awareness of the street level politics in these regions and therefore no idea what social action or change even looks like.
>So what you have is where these countries now can't afford to turn off the supply like they did in the 1970s. Now, Russia, Venezuela, Norway and the USA are huge producers (and net exporters). Solar in particular will continue to bite into oil demand so long term the situation doesn't look great for oil yet those countries that didn't spend their windfalls wisely are facing a harsh future.
This is a valid economic criticism for which belittling these people's faith served no point. Sure, cultural factors can accelerate innovation and financial growth. That doesn't immediately indicate that the problem is theocratic. Industry isn't a culture, it's a combination of skill sets and infrastructure. China is the world's second largest economy and has become one of the few nations considered able to pose a growing risk to America's military hegemony, Europe can't even make that claim despite having vastly more in common with the US culturally.
The penultimate point being, it's shallow and easy to make hand gesture arguments when the only people in the conversation are equally distant from the realities being discussed. That doesn't mean we have no responsibility to at least try not to be intolerant, if anything it's when our audience largely agrees with us that we have a greater responsibility to be interpretive and self critical.
Apologies to everyone for some of the redundant words, especially in the beginning, and spacing. I tried making some edits to improve readability but none of them have stuck.
> Industry isn't a culture, it's a combination of skill sets and infrastructure. China is the world's second largest economy...
It's interesting to see those two statements adjacent to each other. China is a tremendous world power, but if I understand the history correctly, it arrived at this point after a series of (sometimes extreme) cultural and economic upheavals that prioritized modernization over traditional culture.
It's interesting to see those two statements adjacent to each other. China is a tremendous world power, but if I understand the history correctly, it arrived at this point after a series of (sometimes extreme) cultural and economic upheavals that prioritized modernization over traditional culture.
The presentation wasnt the best I agree. The point I was driving towards is that culture can accelerate industrial growth and development but this doesn't mean any /one/ culture or set of beliefs should be presented as superior/better. America became number one (nuanced but I want to avoid another essay) through embracing multi-culturalism, liberty, and being one of the few places that weren't damaged much in WW2 with a nod towards their role in post ww1 decision making as well. China came to be viewed as number 2 and a credible threat to the position of number 1 through radically different cultural processes. So while culture contributed to industrialization in both instances, that doesn't make it sensible to make normative statements supporting either direction as a suggestion for improving the world, or a whole region, at large. These issues are nuanced and if they don't seem nuanced then it's much more likely that we're arguing from a position of ignorance rather than correctness.
> America became number one (nuanced but I want to avoid another essay) through embracing multi-culturalism, liberty, and being one of the few places that weren't damaged much in WW2 with a nod towards their role in post ww1 decision making as well.
The first part is really amusing. America become rich because while Europe was fighting world wars, US was making money on them. US joined WW2 by the very end when it was evident that Germany lost, and arrived just in time to colonize its share of Europe that remains colonized to this day.
Also the fact that US dollar is the world's exchange currency also benefits US immensely. US can print astronomical amounts of money and the whole world becomes poorer with each printed bill. No other country in the world has the same position. If Iran would be in the same position, they would be just as rich without all the "multi-cultural" "liberty" fluff.
The first part is really amusing. America become rich because while Europe was fighting world wars, US was making money on them. US joined WW2 by the very end when it was evident that Germany lost, and arrived just in time to colonize its share of Europe that remains colonized to this day.
Also the fact that US dollar is the world's exchange currency also benefits US immensely. US can print astronomical amounts of money and the whole world becomes poorer with each printed bill. No other country in the world has the same position. If Iran would be in the same position, they would be just as rich without all the "multi-cultural" "liberty" fluff.
> US joined WW2 by the very end when it was evident that Germany lost
Bollocks. The US joined the war because they cut off oil supplies to Japan and Japan saw future conflict as inevitable -- and struck first. They bombed Pearl Harbor in 1941 -- and the war didn't end until 1945. In 1941 Germany had beaten France, the UK, Norway, Denmark, and was on a path to steamroll Yugoslavia, Greece, and possibly the USSR.
> just in time to colonize its share of Europe that remains colonized to this day.
The US military is still in Europe because the NATO is fine with the US footing the cost of defense spending. "Colonized" my fat ass, the reason the EU is able to throw around grand farm subsidies is because the US is paying for missile defense and aircraft carriers.
Bollocks. The US joined the war because they cut off oil supplies to Japan and Japan saw future conflict as inevitable -- and struck first. They bombed Pearl Harbor in 1941 -- and the war didn't end until 1945. In 1941 Germany had beaten France, the UK, Norway, Denmark, and was on a path to steamroll Yugoslavia, Greece, and possibly the USSR.
> just in time to colonize its share of Europe that remains colonized to this day.
The US military is still in Europe because the NATO is fine with the US footing the cost of defense spending. "Colonized" my fat ass, the reason the EU is able to throw around grand farm subsidies is because the US is paying for missile defense and aircraft carriers.
Yeah, forgot to mention that Japan and South Korea are colonized as well.
Footing the cost of defense spending is a sweet lie for the population of the occupied countries. And some of them are actually paying for this "help". South Korea, for example, had to increase the payments for the US "protection". BTW, this is exactly parlance that criminals use to justify racket: "You pay us for protection, pal. Win-win!"
And I also forgot that US spies all over the world. Every computer device has numerous CIA backdoors. This obviously provides huge advantage to US businesses.
Footing the cost of defense spending is a sweet lie for the population of the occupied countries. And some of them are actually paying for this "help". South Korea, for example, had to increase the payments for the US "protection". BTW, this is exactly parlance that criminals use to justify racket: "You pay us for protection, pal. Win-win!"
And I also forgot that US spies all over the world. Every computer device has numerous CIA backdoors. This obviously provides huge advantage to US businesses.
Why can't we belittle faith?
Or, why do we have to tiptoe around clearly inferior thought?
Or, why do we have to tiptoe around clearly inferior thought?
You can belittle faith all you want, that doesn't mean it won't warrant criticism when it's not useful to the topic at hand.
> ironically it seems somewhat thanks to an Iraqi
Wow, what a story! Thanks for sharing.
Wow, what a story! Thanks for sharing.
Thank you! The parent comment was so infuriating that I immediately replied -- but your reply strikes at the heart of the matter. In my opinion is a little orientalist in the mind of many of us who were raised in the west. We are vulnerable due to the limited exposure to those who have lived or presently live in the Middle East and this vulnerability is, unfortunately, easily exploited by many parties.
Deceived by religion? You think it is that simple? Those "monarchs and despots" have powerful allies in Washington. Those allies provide them with the lists and the material resources necessary to remain in power. It is simple to just paint an entire population as moronic but reality is more complex. Western nations have colonized the middle east. Colonialism has evolved from direct rule by occupying forces to indirect rule through proxy dictators.
And people think the refugee problem is bad now. Wait till all the middle eastern economies collapse.
And somewhere off the spectrum is the United States where individual property owners own the mineral rights. Not much worry of one entity selling a whole country full of oil for peanuts in that case.
No they don't. Google "split estate". <googles> Hmm even better there is now a movie with that title. I know about this because the land my home sits on can be drilled for oil and gas because long ago someone (the railroad company who were given the land by the federal government, probably) sold the mineral rights. Also the federal government owns vast tracts of mineral rights.
I understand that mineral rights and surface rights can be separated. I should have mentioned that, as many people are unaware of the fact. What I was highlighting was that in the US individuals and/or companies own property rights to sub-surface minerals below private land, not the government, unlike most countries.
People in the US can still claim federal land in the US for basically free, if they are going to mine productive minerals due to The General Mining Act of 1872[1]. Oil and coal leases are different and the government takes a 8%-12.5% royalty. Still not very much. Most of the value goes to a large number of people in the country, not to the government.
[1]https://en.wikipedia.org/wiki/General_Mining_Act_of_1872
People in the US can still claim federal land in the US for basically free, if they are going to mine productive minerals due to The General Mining Act of 1872[1]. Oil and coal leases are different and the government takes a 8%-12.5% royalty. Still not very much. Most of the value goes to a large number of people in the country, not to the government.
[1]https://en.wikipedia.org/wiki/General_Mining_Act_of_1872
Save for the multitude of sovereign nations within the US that aren't allowed to control their mineral rights.
Only 18% of the GDP of Norway is from oil and gas, though. Even without any savings, Norway would probably end up similar to other Nordic states.
Their oil-funded sovereign wealth fund has a value of 1T USD [0]. If they manage to achieve modest 4.4% returns, those returns would represent 10% of GDP. Last year, it returned 187B USD [1], or the equivalent of 42% of GDP (though I don't believe the fund's returns are considered part of GDP).
[0] https://www.nbim.no/en/
[1] https://www.nbim.no/contentassets/3d447c795db84a18b54df8dd87...
[0] https://www.nbim.no/en/
[1] https://www.nbim.no/contentassets/3d447c795db84a18b54df8dd87...
Yes, but the other Nordic states does not have similar savings, but are still doing well. I agree that it's a huge advantage, but I'm not convinced that the oil has been key for Norway.
I think using only the oil as the explanation is a bit too simple. There is a well functioning social democracy in place, with a high level of trust both in the government and in the other inhabitants.
I think using only the oil as the explanation is a bit too simple. There is a well functioning social democracy in place, with a high level of trust both in the government and in the other inhabitants.
> At the other end is the Middle Eastern countries.
Or maybe Nigeria.
In terms of Norway, I don't think that nationalisation is really the correct concept as different countries, especially communist ones, view the idea differently.
I prefer to avoid the terms altogether and to refer to the qualities of the people themselves who are individually involved.
Or maybe Nigeria.
In terms of Norway, I don't think that nationalisation is really the correct concept as different countries, especially communist ones, view the idea differently.
I prefer to avoid the terms altogether and to refer to the qualities of the people themselves who are individually involved.
>The sad part here is that those people who have essentially been swindled have succumbed willingly essentially in the name of religion. Their leaders are keeping the faith.
>So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was. What, really, do any Middle Eastern countries have to show for this massive windfall?
Actually the Ba'athist dictators and monarchs are against the faith. The only country in Middle East with proper theocratic state is the Iranians, and they are doing "alright" so far as a middle power who is in a decades-long cold war with the current Superpower.
>So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was. What, really, do any Middle Eastern countries have to show for this massive windfall?
Actually the Ba'athist dictators and monarchs are against the faith. The only country in Middle East with proper theocratic state is the Iranians, and they are doing "alright" so far as a middle power who is in a decades-long cold war with the current Superpower.
> At the other end is the Middle Eastern countries. Monarchs and despots have largely enriched themselves and their families at the expense of their country and their people.
You might want to look into who propped up these monarchs and despots.
If Norway wasn't a european nation, it too would have been toppled and destroyed by the US or european powers for their oil.
> So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was.
Religion had nothing to do with it. It's geopolitics. Also, middle eastern nations have some of the largest sovereign wealth funds in the world.
https://en.wikipedia.org/wiki/Sovereign_wealth_fund
> Now, Russia, Venezuela, Norway and the USA are huge producers
The US and Russia are. Norway isn't ( not in total volume at least ). Venezuela could be but due to US sanctions they are not. Not to mention the US led regime change venezuela is about to experience which will once again destabilize and impoverish venezuela.
https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...
> Solar in particular will continue to bite into oil demand so long term
Solar hasn't made much of a dent and won't make a dent anytime soon. Oil demand has increased while solar is just a tiny blip.
https://en.wikipedia.org/wiki/World_energy_consumption#/medi...
You might want to look into who propped up these monarchs and despots.
If Norway wasn't a european nation, it too would have been toppled and destroyed by the US or european powers for their oil.
> So it's sad to me that not only are people so easily manipulated through religion but also what a huge lost opportunity this was.
Religion had nothing to do with it. It's geopolitics. Also, middle eastern nations have some of the largest sovereign wealth funds in the world.
https://en.wikipedia.org/wiki/Sovereign_wealth_fund
> Now, Russia, Venezuela, Norway and the USA are huge producers
The US and Russia are. Norway isn't ( not in total volume at least ). Venezuela could be but due to US sanctions they are not. Not to mention the US led regime change venezuela is about to experience which will once again destabilize and impoverish venezuela.
https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...
> Solar in particular will continue to bite into oil demand so long term
Solar hasn't made much of a dent and won't make a dent anytime soon. Oil demand has increased while solar is just a tiny blip.
https://en.wikipedia.org/wiki/World_energy_consumption#/medi...
Probably no accident that MBS removed his two main political rivals two days ago:
https://www.aljazeera.com/ajimpact/saudis-detain-mohammed-bi...
The country is in deep trouble. Reigns of terror fed by mineral wealth have a way of falling in the most bloody ways.
https://www.aljazeera.com/ajimpact/saudis-detain-mohammed-bi...
The country is in deep trouble. Reigns of terror fed by mineral wealth have a way of falling in the most bloody ways.
I think both KSA and Russia eventually will come to an agreement. Current oil prices are not sustainable for KSA. Their budget deficit is already touching 7% of their GDP (https://mobile.reuters.com/article/amp/idUSKBN1XA2EO). If they need to balance their budget they need the oil price to be at 71$.
Or increase their market share. Saudi Arabia is among the countries who can produce oil cheaper. Under $20 the number of countries that can pump profitably is very small.
Defecits don't matter, until all of a sudden the ability to sell debt is limited. While the US continues it's current policies, I don't see that in the immediate future.
However, one day soon that will stop... and then people will notice that sovereign debt far outpaces any other form of non-secured credit.
However, one day soon that will stop... and then people will notice that sovereign debt far outpaces any other form of non-secured credit.
I doubt anyone in their right mind views a KSA backed bond anywhere near as safe as the US.
The only meaningful revenues KSA has is from Aramco, and Aramco only has 40 years of oil reserves left at current production levels. Their 30 year bonds should have very high yields.
The only meaningful revenues KSA has is from Aramco, and Aramco only has 40 years of oil reserves left at current production levels. Their 30 year bonds should have very high yields.
Russia did not agree to Saudi Arabia's proposal to reduce output so Saudi Arabia are now turning up the faucets to pressure Russia into a deal. Saudi Arabia has no intention starting a price war with US shale producers, this is pure tactics to make Russia agree to an output deal.
The United States has a net export of around 0 barrels, meaning that it is neither an importer nor an exporter of oil today. So macroeconomically the US should be more or less unaffected on an aggregated level.
The United States has a net export of around 0 barrels, meaning that it is neither an importer nor an exporter of oil today. So macroeconomically the US should be more or less unaffected on an aggregated level.
> The United States has a net export of around 0 barrels, meaning that it is neither an importer nor an exporter of oil today. So macroeconomically the US should be more or less unaffected on an aggregated level.
Not true. Shale oil is very expensive to extract while Saudi oil is amongst the cheapest. Low prices are going to put shale producers out of business and the Saudis will gain market share.
Not true. Shale oil is very expensive to extract while Saudi oil is amongst the cheapest. Low prices are going to put shale producers out of business and the Saudis will gain market share.
Arbitrage means that these barrels will flow into the US and offset some of the US production.
Of course, Trump could slap some tariffs there, but high energy costs are never popular (no matter how good they may be).
Of course, Trump could slap some tariffs there, but high energy costs are never popular (no matter how good they may be).
At this point $60/bbl is a low price. People buying still remember $120/bbl.
Keep in mind oil is not oil. The US produces some fairly top quality crude by global standards. This is both good and bad.
You don't want to be using WTI crude to produce bunker fuel - that's like using truffles to season canned beans - you could do it, but it doesn't make rational sense to do so. Better to export your WTI for uses that need such a quality crude (and pay accordingly), then import some low quality OPEC basket crude to produce bunker fuel.
You don't want to be using WTI crude to produce bunker fuel - that's like using truffles to season canned beans - you could do it, but it doesn't make rational sense to do so. Better to export your WTI for uses that need such a quality crude (and pay accordingly), then import some low quality OPEC basket crude to produce bunker fuel.
US banks lend frackers over $200 billion.
https://www.nytimes.com/2018/09/01/opinion/the-next-financia...
They were squeaking by oil fell from $110 to $40 in 2014.
Many will go belly soon triggering bank failures.
I think this statement dramatically underestimates the scope and the size and the banking industry, as well as how much debt banks keep on their books. 200 billion will be a ton of pain in localized areas for banks, but they will not be writing off the whole loan, and will have assets - the same oil fields - come over. This happens every ten year or so.
On the other hand, if this oil war really does do enough damage to hurt shale, it will also bankrupt Saudi Arabia and Russia. Given both of their recent actions on the world stage, even a 200 billion dollar write off might not be the worst thing in the world.
On the other hand, if this oil war really does do enough damage to hurt shale, it will also bankrupt Saudi Arabia and Russia. Given both of their recent actions on the world stage, even a 200 billion dollar write off might not be the worst thing in the world.
Marginal costs are lower for Aramco, right?
That doesn't seem like much of an issue though. $200 billion isn't very much if you look at the actual size of the banking industry.
I think the real problem here is more the issue of Russia and myriad of Middle Eastern countries being so dependent on their oil exports in order to stay afloat economically.
I think the real problem here is more the issue of Russia and myriad of Middle Eastern countries being so dependent on their oil exports in order to stay afloat economically.
Honestly, they'll probably do some sort of term extension, or even suspension of payments in order to avoid any sort of default. Plus, there was a fair amount of fracking consolidation around 2014 due to the price crash.
Tomorrow morning will be a bloodbath for US securities.
No it want. A supply shock to one industry even a big one does not lead to banking failures. The fracking industry is incredibly dynamic and can operate cheaper incredibly fast, and if price rise can start producing again quickly as well.
Let’s say you believe the prices will recover in a year, what’s the best stock market play to profit?
If you can time it perfectly (e.g. directionality is constant), then UWT or GUSH are 3X crude ETFs. The 3X means you are exposed to decay so the return won't be as good if it goes down then up.
This is also assuming either ETF exists come Monday. The rapid drop (>30%) could mean the products are ended.
In that case it may be worth getting long-term XOM (or other petroproducer) calls.
This is also assuming either ETF exists come Monday. The rapid drop (>30%) could mean the products are ended.
In that case it may be worth getting long-term XOM (or other petroproducer) calls.
Buy LEAP calls on QQQ 1+ year out
so this does look like a recession - with the dow jones industrial average falling 3000 points over the last month and oil pricess falling steeply. does it?
But low oil prices are an effect of a recession, not a cause.
> with the dow jones industrial average falling 3000 points over the last month
There is a difference between a recession and a stock market correction. We've already had a couple of stock market corrections during our 11 year bull run. The last one being in 2018.
https://en.wikipedia.org/wiki/List_of_stock_market_crashes_a...
> and oil pricess falling steeply.
We've had a couple of steep oil price drops during our 11 year bull run.
https://www.macrotrends.net/1369/crude-oil-price-history-cha...
> does it?
It's an election year with interest rates declining and strong employment numbers? No. I don't so. But we'll know for sure in a few months.
If anything, the low interest rates and low oil prices usually mean economic growth. Considering coronavirus curtailed consumption in Q1, I suspect we'll be seeing record economic growth in the 3rd and 4th quarters as consumption and economic activity from Q1 is shifted to the future.
There is a difference between a recession and a stock market correction. We've already had a couple of stock market corrections during our 11 year bull run. The last one being in 2018.
https://en.wikipedia.org/wiki/List_of_stock_market_crashes_a...
> and oil pricess falling steeply.
We've had a couple of steep oil price drops during our 11 year bull run.
https://www.macrotrends.net/1369/crude-oil-price-history-cha...
> does it?
It's an election year with interest rates declining and strong employment numbers? No. I don't so. But we'll know for sure in a few months.
If anything, the low interest rates and low oil prices usually mean economic growth. Considering coronavirus curtailed consumption in Q1, I suspect we'll be seeing record economic growth in the 3rd and 4th quarters as consumption and economic activity from Q1 is shifted to the future.
Yep
If Germany or France locks down parts of their country to stop Corona, then it will be international recession 100%
If Germany or France locks down parts of their country to stop Corona, then it will be international recession 100%
And the interest rate cratering.
Meanwhile in Australia we're still paying for fuel at a consumer level as if it's $120/barrel.
Oil is sold in USD you have to take into account the exchange rate between AUD and USD. We're seeing the same in Norway, but when you factor in the exchange rate and additional taxes it's effectively the same.
prima facie this is good for businesses which rely on oil (airlines, etc) but most of the big companies hedge the price risk (both up and down) via futures contracts, so the price cuts are not likely to help any major businesses in the short-term. feels like red for the foreseeable future...
These hedges are going to further ruin airlines. Now they have giant margin calls on their money-losing hedges + they hedged not assuming 40% drop in business, so now they're overhedged.
How much of US oil production is unprofitable at $30/bbl?
How much of any oil production is unprofitable at $30/bbl? I don't think it is clear that even Saudi oil makes money at that price.
If the Saudis haven't been trying to flood the market for the past 5 years, I don't know what they are trying to do.
If the Saudis haven't been trying to flood the market for the past 5 years, I don't know what they are trying to do.
The big middle east producers have cash costs around $10/bbl. They are definitely making money. Whether or not they are making enough to cover the budget necessary to keep their populace complacent is another matter.
Saudi Arabia needs $80/barrel to meet their budget, Russia around $42/barrel.
That's assuming output is fixed. If OPEC has failed, that's no longer the case. Since Saudi's unit costs are lower, they can dominate Russia in the long run. The global finance sector will certainly help them with that. Of course, it will be risky, but we are talking about the people who invested in Vision Fund.
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IIRC most ME budgets are in the red with oil below about $65/bbl. Some economies can last longer than others though. SA has been trying to kill the US fracking industry for a decade but so far no luck.
Once fracking came online in a big way it put a price ceiling on oil below what most ME budgets could tolerate. Once that was in place OPEC was doomed and here we are.
Once fracking came online in a big way it put a price ceiling on oil below what most ME budgets could tolerate. Once that was in place OPEC was doomed and here we are.
IIRC Ghawar has a production cost of something ridiculously low like $7.50 per barrel
The simple answer is that it's complicated.
You have to factor in currency exchange. In Norway we're starting to become unprofitable at around $32/bbl with the current weak NOK against USD. Some older fields are more profitable than others, so it's not like the whole sector becomes unprofitable at a single point.
There are things that Norway could do in order to strengthen the NOK against USD, but this would be at the cost of other export industries, like fishing and metal, which combined are considerable export industries.
You have to factor in currency exchange. In Norway we're starting to become unprofitable at around $32/bbl with the current weak NOK against USD. Some older fields are more profitable than others, so it's not like the whole sector becomes unprofitable at a single point.
There are things that Norway could do in order to strengthen the NOK against USD, but this would be at the cost of other export industries, like fishing and metal, which combined are considerable export industries.
almost 90% of shale is unprofitable at $30/bbl
My hands got a bit bloody trying to catch this falling knife
Could this have an impact (positive or negative) on the renewables industry?
Eh, 'renewables' (presumably you're thinking of solar and wind-generated electricity) don't really directly compete with oil (at least in the USA). Oil is a negligible part of our electricity generation mix. This might somewhat delay the switch over to battery-electric vehicles, as it lowers the cost of gasoline/diesel, but that has relatively little to do with renewables, per se, and more to do with the relative costs for electric power (regardless of source) and gasoline/diesel.
A secondary effect, however, could be that it temporarily wrecks the fracking industry in the US, eventually leading to much less natural gas production, raising the price of natural gas (and thus being good for wind/solar, which will probably have gradually declining costs for the foreseeable future).
A secondary effect, however, could be that it temporarily wrecks the fracking industry in the US, eventually leading to much less natural gas production, raising the price of natural gas (and thus being good for wind/solar, which will probably have gradually declining costs for the foreseeable future).
Raising the price of natural gas is good for wind and solar, but moreso utility scale battery storage, which is what is competing against natural gas for firm capacity ("power on when you call for it").
Renewables compete against the long-term oil price, not the spot price. If the Saudi are offering long-term cheap oil I haven't noticed.
> Renewables compete against the long-term oil price, not the spot price.
Not really. Hybrid vehicles for example tanked the last time oil prices plummeted.
Not really. Hybrid vehicles for example tanked the last time oil prices plummeted.
Tanked means what? Did any manufacturer close a factory, decided not to open one, cancel next year's model of a hybrid, etc?
What's the number of factories not built or cars not produced because of the low price of oil?
Considerable. All of the three biggest car parts manufacturers here in Germany have announced redundancies, two of them have announced factory closings.
https://www.handelsblatt.com/unternehmen/industrie/autozulie...
https://www.handelsblatt.com/unternehmen/industrie/zuliefere...
https://www.handelsblatt.com/unternehmen/industrie/autozulie...
https://www.handelsblatt.com/unternehmen/industrie/zuliefere...
Yes - negative impact.
At the end of the day renewable energy is just producing a commodity product - electricity. As fossil fuels decline in price the wholesale price of electricity declines making it less attractive to build wind/solar etc. Existing plants will obviously stay online but people who invested in that sector will be hit.
At the end of the day renewable energy is just producing a commodity product - electricity. As fossil fuels decline in price the wholesale price of electricity declines making it less attractive to build wind/solar etc. Existing plants will obviously stay online but people who invested in that sector will be hit.
yes ;)
High enough oil prices and people invest in alternatives But oil and its products are used in the production of many renewable infrastructure too ... so there's a point of diminishing returns.
And at this point the issues of long distance transportation and large scale production are hurting both ends.
High enough oil prices and people invest in alternatives But oil and its products are used in the production of many renewable infrastructure too ... so there's a point of diminishing returns.
And at this point the issues of long distance transportation and large scale production are hurting both ends.
On it's face it's actually great for consumers and business, but no market likes sudden price dislocation as big as this.
The high-yield bond ETFs have been crashing as global supply economic concerns mounted around the coronavirus. I can only wonder what the debt holders for oil and gas companies are thinking right now.
The high-yield bond ETFs have been crashing as global supply economic concerns mounted around the coronavirus. I can only wonder what the debt holders for oil and gas companies are thinking right now.
> I can only wonder what the debt holders for oil and gas companies are thinking right now.
decent chance they're asking for a federal bailout, and praying that russia capitulates soon
decent chance they're asking for a federal bailout, and praying that russia capitulates soon
This is the best opportunity individuals have had to push back against fracking in years. I’ll be doing more than I have been to conserve gas after the Corona WFH ends. I’d love to see a concerted national effort along these lines.
Hopefully the price crash will last long enough to bankrupt the shale industry.
Hopefully the price crash will last long enough to bankrupt the shale industry.
Keep in mind that low oil prices also mean that EVs become less of a value proposition. Once petrol prices reflect oil prices, it becomes even harder to make a rational economic argument towards EVs.
There is barely any connection with oil price to pump price in Europe. It is mostly taxes and oil price is minimal. Same with electricity.
Even if the current companies go bankrupt that won't stop fracking, their setup will be rebought and restarted by someone else unless oil prices remain at this level forever.
What are the economic knock-on effects of a price war in oil?
The good: gas will become temporarily cheaper, which will help consumers of gasoline save money that can either be spent on other goods, or socked away for a rainy day.
The bad: Industries that depend on higher prices of oil (electric vehicles, fracking companies) will suffer.
The bad: Industries that depend on higher prices of oil (electric vehicles, fracking companies) will suffer.
Could be catastrophic. Banks have lent out half a trillion to fracking companies who need oil to be at least $50 a barrel to be profitable. If those frackers go out of business, combined with COVID-19, combined with literally no ammo left (deficits sky high, rates already super low).... it’ll be 2008 all over again.
This is nonsense. Banks don't fail that easily, your overestimating the relative size of fraking and the idea that the Fed has 'no ammo left' is just nonsense that no the waste majority of monetary economist would disagree with.
Assuming appropriately priced externalities, low oil prices are a boost to global GDP, but harm net oil exporters.
Corona really looking like the black swan event that ends this expansion. What a time.
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Markets are going to be wild this week
Can’t visit link without enabling tracking and fingerprinting
How does this affect the value of the Dollar? (Taking the oil/dollar into consideration.)
Yay, cheaper fuel prices now right? Or do the gas stations pocket the difference here?
"Up like a rocket, down like a feather." Oil companies, gas stations, etc. try to keep prices high for as long as they can, but the prices fall over time.
I'm already seeing a gallon at $1.89, so the pocketing seems minimal...
Wishful thinking moment. I would love this moment not to be a moment where people say something along the lines of 'oh cool, I can drive hummer again' and something more like 'we have some room to breathe, how can we make sure we are not as dependent in the future'. Again, wishful thinking.
What ever happened to Peal Oil?
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Its was always a idiotic thing snake oil salesman tried to sell to idiots. Just as Peak Coal was in 1850, but people lever learn and its always a great way to sell books and get invited to give talks.
It's idiotic to assume that resources are endless. Getting the timing right on the other hand is hard, especially given that predicting something will change the outcome.
Just like what is currently going on with climate change. Hopefully acting upon the negative trends will improve the outcome.
Just like what is currently going on with climate change. Hopefully acting upon the negative trends will improve the outcome.
I didn't assume endless resources, neither did all the people and economists over the 250 years who had to help people show all the charlatans pushing their idiotic opinions.
> Getting the timing right on the other hand is hard, especially given that predicting something will change the outcome.
The prediction of the people in the markets, matter, not smarty-pants intellectuals who write books with titles to sell to suds-intellectual middle class.
> Getting the timing right on the other hand is hard, especially given that predicting something will change the outcome.
The prediction of the people in the markets, matter, not smarty-pants intellectuals who write books with titles to sell to suds-intellectual middle class.
The oil price rose until it was worthwhile getting oil out of tar sands and with fracking. Both really bad for environment, btw.
Also, Renewables.
Also, Renewables.
What is there to fear of a price war?
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"Catastrophic for failed/failing petro-kleptocracies Iraq, Iran, etc - may prove existential 1-2 punch when paired with COVID19.”
Good!
Good!
Even before recent drops things were looking rather dire there.
https://calgaryherald.com/news/local-news/alberta-sheds-1800...