収束ゾーンでのライフ: Life in the Convergence Zone

ETA: The data is right, but is incomplete data. See below.

Okay, so, historically, most of oil traded for US consumption is not traded directly on the NYMEX; that's the spot market and while it does set the price, it's not the bulk of the oil - it's the tradable oil, and it's about 3%-5% of US consumption overall, which is to say, under 1M barrels/day.

That's historically, anyway. Check out trading volume over the last month and a half:


From Marketwatch.com's graphing tools

That's original except for my highlighter-coloured adds (two arrows, some obvious text). The last day's volume on that chart is actually higher than shown in this view, the chart isn't complete for today yet, because volume data lags a bit.

We're seeing trading volumes that exceed total US consumption and continuing trading volumes twenty times normal in the face of rising prices. Now I can think of several things this could mean, from day-traders swapping the same 1M barrels back and forth and back and forth (maybe this is one of the places those liquidity injections have gone) to demand destruction from contracted-delivery cancellation freeing more oil for the trading pits (but not that much, sorry - and particularly not in the face of rising prices) to China moving in to buy oil off the US spot market directly (in which case, where's that oil coming from? US inventories have been falling sharply but not that sharply) to significantly more dire interpretations. But really I just don't know.

But unless this data is wrong, something is going on. A one-day error showing a massive volume pop I'd attribute to data error. But I can't do that for this many days in a row. So... what the hell?

ETA: Since I've had a few people raise the "it's just the end of the year" response (two in IM, one below): please note that this is a two-year chart. This isn't normal end-of-year trading. For that, look at the tiny bip at the end of November '06 in this chart for comparison. That's how far down the rest of this chart has been compressed by this year's data. If the data presented here is correct, this is very, very different.

ETA 2: Y'know what's even weirder? Nobody else seems to chart this. At least, not the places I use, and not the places I found in Google that I can get to without being a subscriber. That means I can't validate (or invalidate) these numbers. It also means some other things. See comments (linked) below for details.

ETA 3: I got explorative with their URL parametre passing and was able to get data back to mid-2005, but no further. Nothing like this showed up EOY 2005, either - not even the little bump you get showing up EOY 2006. But that's throwing my own parametres at their graphing software so while I'm reasonably sure given everything that it's right, I'm less confident. Also, 26 December volume numbers are still being reported as 5 Mb, which is still crazytalk high, but if final is also a dramatic comedown from the previous month or so, which makes me ask okay, why? Is somebody on vacation, or is somebody done setting something up?

ETA 4: This does not entirely jibe with what I have read previously (including yesterday), but that could have been wrong or I could have misunderstood before. However, according to a commenter over on The Oil Drum, Marketwatch's charting, while accurate, only shows contracts expiring in a single month, which is to say in this case February, which makes their numbers look very strange. You have to have tools they don't offer to make volume numbers across all months appear in a chart. (And since theirs are the only tools I have that show it at all...) They also say that spot-market volume has gone up dramatically in recent times, but not anything like this chart would have you believe. The part that doesn't line up is that I've read (from multiple sources) that the vast majority of actual pricing follows the NYMEX but is not actually traded on the NYMEX - that's where I get that 3% to 5% number - so if these are the actual volumes on a monthly basis, that implies that most oil has actively moved to this market.

The economic case for 6A selling to SUP is pretty clear:

Russian use (active accounts, site visits, both in thousands, from here, the Russian-language news and support LJ):



Global use (a different figure - posts per time period, 85% non-Russian, but still indicative of direction) since 6A took over and started pissing everyone off (same source):



So there you are. Seems pretty obvious to me. SUP has a real opportunity here if they take it. Mind you, the very next post is someone asking if there's an easy way to delete all comments they've made across LJ as part of deleting their account.

The only problem as far as I'm concerned is that it's not sooner. (They're starting one new one a year.)

Ferry District votes for Kenmore-to-Seattle runs
By Joshua Adam Hicks
Staff Writer
Kenmore Reporter
November 28, 2007

http://www.kenmore-reporter.com/jumpstory.html?story=news1&pubdate=11/28/2007

The King County Ferry District voted Nov. 13 to enact a new work plan that will provide passenger ferry services between Kenmore and Seattle by 2011.

Four other routes are slated to appear on Lake Washington, and operation of the existing Vashion Island and West Seattle lines will continue as part of the program.

Reports are coming out that the renewables tax credit and portfolio are going to get cut from the energy bill in the face of Republican opposition and Pelosi and Reid's desire to get a bill out by the end of the year. If true, this would be a brutally stupid decision on all sides, but, well, what else should I expect?

Here, look at this instead; zoom in on The Last Supper as far as you could possibly want, if not further. Want to see individual paint flakes? You can. Want to zoom in to see the buildings visible out the window over Jesus's right shoulder? No problem. It's neat.

Meanwhile, this is worksafe, and funny, and so is this.

( Memage )

That was neat, some of this went away. Lemmie try again.

This article makes it sound like the credit crisis is mostly a problem in BBB CDOs, which is to say Collateralised Debt Obligations. Here are the graphs for all classes. Note AAAs are trading at under 90c/dollar, which is to say, trading at a capital loss. That ain't right. (AA is around 65c, and it gets worse from there, bottoming out at BBB's 20c/dollar.)

Also, that "new home sales rise" report is basically just a lie, which, pleasantly, Marketwatch notes; sales are only "up" if you compare this unrevised number against last month's heavily-revised downward "revised" number. The problem with that is that this month's number will also be revised, so you are comparing apples to oranges, as it were. Comparing to the unrevised number - making the apples-to-apples comparison - you have a 3.2% drop month-to-month, aside from the 35%-odd drop from a year ago. And, of course, existing home sales weren't pleasant either.

Meanwhile, in ARE YOU FUCKING KIDDING ME?! news, over at Global Guerrilla, we have an introduction to the concept of oil production peak, with this amazing little codicil:

One of the reasons I brought up this topic is that I was surprised to find that nearly all of the top people in the CIA, NSA, DHS, DoD, etc. that I have talked to/with over the last few months didn't know anything about the topic. Hopefully, I can put this on their forward looking radar.

Christ, I hope that's wrong. I mean godt dammit. [ETA: that codicil has been redacted. Good.]

Other items of interest:
Fox News floats the theory that the California wildfires were caused by al Qaeda, lying about key facts to make it seem more likely; Rudi Giuliani just comes out and says that whether torture is torture depends upon who is doing it, clearly meaning that if it's the US, it's not; the new Atty. General nominee refused to testify whether he considers the torture technique known as waterboarding to be torture, so some of the Senators on the committee - none of the Republicans, but I think all the Democrats - wrote a letter, oooooooooo; Presidential Candidate Mike Huckabee repeats the fundamentalist canard that "most" of the signers of the Declaration of Independence were clergy; this is a lie that has been gaining some popular-knowledge traction in that community as of late. And Bernard Lewis in the Wall Street Journal writes that we should be more like the Soviet Union in application of terror tactics, somehow managing to miss that hello, the USSR fell, you moron; accordingly, they probably weren't the "strong" ones. Stop emulating the oppressive torture-wielding failures. Christ on a fucking pogo stick.

And finally, in a momentary gasp of sanity, Senator Chris Dodd is fighting the Democratic leadership to stop a deal with the White House granting retroactive immunity to telecom industry lawbreaking in the warrantless-wiretapping cases. Since Congress won't investigate these, and the Justice Department won't either, the only avenue remaining open are the private lawsuits; retroactive immunity would shut those down. Senator Dodd has a page of people up to contact. I suggest doing so.

If anybody, and I mean anybody, still reading this is on a a teaser-rate loan or primary/secondary loan pair or any other form of thing that you can't afford when the rates jump up to whatever high they can jump to when the introductory rates expire, and if your refinance option is anything other than a fully-conforming AAA-grade mortgage, then for the love of the gods, try to refinance Monday; you are out of time. And go read that article now please to see why.

Did you read that? Okay, good. What's causing this is the collapse of the secondary CDO market - the private market where these loan instruments are financed and sold after closing. For nonconforming and jumbo loans, it's all but dead. (I talked about this again last week; it hasn't gotten better since then.) Without that market functioning - and right now, please understand, it is in demand failure - non-prime/non-conforming loans are somewhere between not affordable and not happening, as lenders price themselves out of that market, as per the article above.

None of that is speculation. It is, at this point, history. I'm not guessing about anything above this line; these are things that have already happened. (I suppose I'm relying on interpretation of motives by others, but it's not a big leap.)

All this is why that Jim Cramer guy was freaking out on CNBC on Friday, begging for rate intervention from the Fed. When he says only rich guys like him can get new loans now? Sure, that's hyperbole (as is his segment, usually) but the above market failure is what he's talking about. Here's the bigger problem: he's right in that if Bernanke doesn't live up to his "Helicopter Ben" moniker, this doesn't get better soon, and more things implode. Unfortunately, the host is also right when she says a substantial rate cut would be "armageddon" - it'd be armageddon in the accelerated-collapse-of-the-dollar sense. That's what that means.

I think he might well be wrong about the idea that a rate cut would save the situation, though. That might not be enough.

Now if you want to get into speculation - well, I don't usually talk about my worst-case scenarios, because I really don't believe in them myself most of the time, but...

( here it is... )

(As an aside, the thing to note about the good consumer confidence number which came out last week is that the figure has become detached from everything except gasoline prices, with which it is dramatically well linked over the last several years. And meanwhile, gas prices have been falling steadily even as crude oil set a new record high last week before finally giving back a couple of dollars. That's neat. Oh, and not to call shenanigans, but, um, I'm callin' shenanigans on this sudden revision of American personal savings rate to "almost entirely positive" for the last 26 months instead of negative that entire time, which had been the report until a couple of weeks ago. Surprise! Combine that with the monkeyshines on the unemployment birth/death model (that model they won't release for public perusal), and dropping the M3 on the basis that "we don't need it," I'm getting an awfully sketchy feeling about this stuff. But that's at least partly my own native sense of distrust, and besides, I digress.)

( Now, why does this matter if you don't have a house? )

I leave the rest for you. And before you ask: I don't know what the market is going to do tomorrow. It could jump 250 points. It could drop 250 points. That's about the range we've been seeing. I've seen this kind of volatility in the market before, in '99-2000; I didn't like it then, and I don't like it now. Good luck.

The Supreme Court has overturned Dr. Miles Medical v. John D. Parke Sons (1911), which held that manufacturer price-fixing agreements between manufacturers, distributors, and retailers, was, by presumption, a violation of the Sherman Anti-Trust Act. This type of price-fixing is now presumptively legal, though it can be ruled illegal on a per-case basis if it is specifically shown to have damaged competition.

This is a fundamental change to retail landscape in the US and will increase upward pressure on prices, as various types of discounting will become much easier to stop. (Costco, for example, will probably be a big loser here; so will internet retailers.) SCOTUSblog talked about it during the argument phase, and has more commentary now. Manufacturers will be able to broadly set minimum price requirements at retail as a condition of sale to distributors (and distributors will be able to do the same to retailers), even though they no longer own the goods, rather than suggestions, as seen in the MSRP. The question of whether this is anticompetitive is slightly different as price-to-consumer is not the only measure of competition, but there's little debate that it will make average retail prices higher. The overall effect will be interesting to watch.

(Original pointer to the gaming blog courtesy ysabel.)

OPEC sees no need to raise production this summer, unlike usual, despite near-record prices. Similarly, a week ago, Saudi Arabia said they saw no need to raise production past 2009. A variety of sources have stated that Saudi Arabia will not be capable of raising its output past 12.5m bpd, political assurances to the contrary aside. There is also the secondary but non-dismissable problem of increasing Saudi domestic demand, subsidised, which naturally cuts into exports.

(Note that the last link refers to a 2006 set of graphs; the production numbers on those graphs have so far proven somewhat optimistic, and Saudi production did not reached the projected 2006 numbers, and is not on target to reach the projected 2007 numbers. Of course, that doesn't stop people from writing headlines like "Saudi production to hit 16m bpd" based on a UK oil consultancy company saying that Saudi Aramco could hit that by 2025.)

As I've made a bit of a habit of saying - though possibly not as much as I should have, being distracted by the fundamentalist movement and university work - I believe we have a rather sharply limited amount of time before this issue becomes rather critical, and I strongly urge that people work locally to affect zoning and development codes to end automobile-only developments. Most housing development in the United States has been, and continues to be, car-only; if you don't have a car, you can't get to any of the things you need. Things are a bit better up here in Cascadia, but not nearly as better as they could be. This situation is encouraged, not discouraged, by government, at this point mostly as a legacy of 60+ years of automobile-focused zoning and subsidies, most of which continue to exist. From a development standpoint, there appears to be little little time left (years, not decades) to make real adjustments to this model before disruptive problems arise.

On an individual level, of course, I mostly have to say what I've been saying for the last couple of years: if you are carbound, move. Go someplace you won't be. Be within walking distance of high-occurence, high-reliability, flexible transit, and within walking distance of many things you need and enjoy. I also recommend biking, it should be a nice summer for it - but only places where you can safely do so, of course, which limits many peoples' options.

Incidentally, the Deutsche Bank analyst projections of possible outright gasoline shortages in North America - as well as Matthew Simmons's comments to the same effect - are refinery-issue based more than crude-supply based, per sé. But they should be noted as a temporary (if significant) inconvenience.

dogemperor has been following the Chinese-import gluten/contaminated food story closely, and it's now confirmed that it's in the human food chain. Latest post here, news ticker post here.

The whole story has been rather worse than you'd think, if you only listened to, say, national news on the radio, so you may wish to read up.

Meanwhile, in the rest of the world - all the non-frozen bits - we have a cavalcade of zomg and wtf. Here, have a bunch of links.

The Daily NK, a North Korean defector-run site, says the idolisation programme in North Korea consumes 40% of the NK budget;

North Korea importing giant rabbits from German giant-rabbit breeder to try to address some of their chronic starvation problems; cue Night of the Lepus theme music, and see if you can't get a state composer to weave in a Food of the Gods leitmotif, can't you;

Crazy-ass Fox News Chorus Line member Sean Hannity has a new schtick: declaring people Enemies of the State;

The Sunday Times reports Robert Mugabe's policies have created 1.3 million orphans;

From The Independent, a much-belated story about how Dick Cheney was talking about oil production peaking - as a Halliburton director - back in 1999. "Lest there be any doubt about what was at stake, the man who was to become one of the most powerful proponents of the invasion of Iraq went on: 'Oil is unique because it is so strategic in nature. We are not talking about soapflakes or leisurewear ... The Gulf War was a reflection of that reality.'" Neat, huh?

Electronic Freedom Foundation trying to get the TSA to publish its regulations for travelers - particularly the one where they make people show IDs before boarding airplanes. The TSA has refused, repeatedly, and the Supreme Court has now let that stand, meaning we effectively have secret, or at least unpublished, law;

And rumours are flying that the Chief Executive has has declared war on Iran. As far as I know, it's hard to argue that a consulate raid isn't an act of war, so they pretty much have a point. Fun!