December 17th, 2015

Something to Worry About and Good News for Everyone but Shkreli

Beginning with the "something to worry about": Oklahoma has a lot of earthquakes, probably because they have wastewater reinjection wells (they suck stuff out of the ground and then pump some of it back in, keeping the money making part. The scale this is happening on is so vast it causes seismic activity). Fine, whatever, but they _also_ are the location for where all the oil is stored waiting for the price to go back up. That oil is stored in above ground tanks (really huge ones) in and around Cushing. There was this period of time during the fall in the price of oil when people started drawing graphs of How Full Is Cushing, to try to calculate when this last support for the price of oil would go away. Cushing is now Full, and then some. A big quake, like the New Madrid long ago, would have apocalyptic consequences if it affected Cushing.

Why is there so much oil stored there? Well, because we're making more oil than the world needs. Why are we making more oil than the world needs? That is a complicated geopolitical question. But the simple answer is that commodity producers tend to be persistent: they reliably overproduce until the bust is bad enough to force people out of production and then things adjust. Normally, OPEC or a similar organization would get everyone at the table and production would be reduced, dammit, to get the price back up, however, ISIS and Russia both fund their governments with oil production so they are _not_ going to cut back and it is in everyone else's interests to keep the amount of money they get per barrel absolutely as low as possible. So the overproduction is somewhat politically driven, in that political measures to reduce overproduction are de-motivated. (We are making too much oil so that it is cheap so as to put the squeeze on people we don't like. Basically. Where "we" is a diverse group of countries with wildly variant interests that happen to agree on this one point.) Anyway. Extra oil goes somewhere, and Cushing is basically the place where you can park oil, that isn't an aging tanker parked in the North Sea somewhere. The gods of the internet have not yet turned off "cushing oil storage" in images search at google, so you can get a sense of what the place looks like that way. (They may yet do so -- a lot of people are also worried about other kinds of risks at Cushing.)

Now for some good news! For everyone except Shkreli. He's the guy you love to hate for jacking the price on some obscure drugs, and can never remember his name. He has finally been arrested.

Couldn't happen to a more deserving person!

I apologize for the lack of juicy zoning stories. Maybe I'll find some later today.

Wasting time playing games and listening to Bloomberg TV

Obvs, it's nonstop why did the market go up after FOMC? Why did it go down today?

Let's ignore that. There was someone ("I'm a credentialed economist. I can prove this to you." Srsly.) claiming that there just HAD to be a high end surprise on inflation and thus hikes next year. Argument came down to, "I think that $45/barrel of oil is a conservative estimate for the end of next year." plus Wage Pressure Will Finally Occur It Has To.

This is an interesting argument, and clearly, the Fed has gone over all the data he has (because he's basing his conclusions off THEIR BEIGE BOOK). The interviewer gently (they are always so gentle) pointed out that he failed to consider which members of the committee would be voting over the course of next year and which dots on the chart corresponded to them and thus what the actual rubber meets the road estimate of next year's inflation was. (He had not factored in who votes next year. *head desk* Might be an economist. Isn't a politician of any sort.) But in no way did this redirect him. He CANNOT IMAGINE wage pressure not getting worse over the next year.

Let us ignore, for the moment, how many happy dances we will all be doing should inflation actually creep up to 2% next year. How much more possible it will be for people to borrow and thus spend. How lovely it would be for workers to be paid more. How lovely it would be for more people to have jobs who want jobs. (Because his paranoid vision of It's Worse Than You Think is actually GRAND news for the economy. He's got a bankrupt system of morals -- hey, he's a trained economist! -- and lives in upside down world.) We will ignore all that.

Instead, let us contemplate how you could reduce unemployment and NOT have wage pressure. *a quiet moment for you to think about it* Here, I'll give you a hint.

Basically, the workforce has been aging for a while now. And the Great Recession aggravated that. Should the older workers feel comfortable retiring, and the younger folk who want jobs be hired to replace them, it is quite conservative to assume that the younger workers will be paid quite a lot less than the older, experienced, etc. workers who they replace.

And thus, wage pressure is significantly attenuated by a trend that is all but inevitable and has, in fact, been widely predicted.


ETA: I ignored his $45/barrel prediction, because I've already discussed oil pricing in the context of Worrying About OK Earthquakes -- no, not okay earthquakes. Oklahoma earthquakes. Everyone wants oil to stay cheap. Thus, we will overproduce to keep it cheap. Thus, there will be no price turnaround until we get better behavior out of the people we are punishing. We are -- surprisingly! -- a patient people. This could go on for a while. I would say I'm not sure why he doesn't understand it, however, I have already observed that he is no kind of politician. So never mind.

My Husband Offers Up This Zoning Story

However, it is not particularly funny, and it is from last February. It is certainly extreme, however, in that it got so bad that one of the sides of the dispute is looking at jail time.

By October, the husband was in jail, even tho the turbine was down. They were supposed to also remove the foundation.

Lawyers have already made the obvious comparison to Don Quixote:

I have not been able to find further updates after the October jail time.

Let this be a lesson to all of us. While it is Good Clean Fun to mock and display contempt for zoning boards, if we actually find ourselves interacting with one, we must comply. Or Else.

A Better Endorsement Could Not Be Bought

The story is about Putin's press conference. During the course of this press conference, Putin had a variety of seemingly positive remarks to make on the subject of Trump.

I am in no way prepared to attempt to unpack everything going on in this, not least because I'm pretty sure sarcasm rarely survives translation, so I can't be sure of what Putin really meant. It is, however, at least on the surface, wildly hilarious.

ETA: In unrelated news, YES, Adelson bought that paper in Nevada. Also, the guy with hair on All Due Respect can't pronounce Nevada correctly. Dude's like a live action cartoon of himself. (Yes, I know what his name is.)