Commodity bear market now worse than stocks' slide

Los Angeles Times

October 16, 2008

In the retail business, a half-off sale usually attracts a swarm of shoppers.

So far, that isn't happening in the battered commodity market, where buyers pretty much remain on strike.

Oil on Thursday joined the lengthening list of raw materials now marked down at least 50% from their record highs: Crude futures in New York slid for a third straight day, losing $4.69 to $69.85 a barrel.

That left the price down 52% from its record close of $145.29 a barrel on July 3.

Oil's plunge has been steeper than the stock market's dive. The Standard & Poor's 500 index has fallen 39.5% from its all-time high reached a year ago... .

_________________________________

Again, why should and how could the average middle class or poor American identify with commodity futures traders and investors who are whimpering daily about falling crude oil prices?

We on limited incomes have been under virtual house arrest for the last year as gasoline prices climbed from $2.60 a gallon to a ridiculous $3.50 or more.

I encountered no mercy or compassion from any energy company CEO, any wealthy war-mongering Bush administration neocon, or any New York Mercantile Exchange wheeler and dealer as I put off a 150-mile shopping trip to my regional commercial center month after wearying month because I could not fit a tank of $3.50 gasoline into my budget.

These Republicans did not give a damn that I could not afford to go anywhere. They passed by on the other side, as it were, confident their bubble of prosperity was as impervious to loss or change as my poverty is grinding. 

I have no doubt that those making the most from petroleum drilling and refining will find a way to prevent market forces from causing the cost of gasoline to fall to a level commensurate with my income. 

But while they are fumbling and fretting with the methodology of their return to preeminence, I will enjoy whatever limited relief I may encounter at the gas pump.

Call it evidence of Marx' anticipated proletariat v. bourgeoisie clash.

Call it evidence of unregulated laissez-faire capitalism running rampant after eight years of Republican neocon policies of looking the other way while their legions in the financial sector screwed the rest of us.

Call the present market slide what you will in support of your ideological and political predispositions.

There is no denying the presence of a predictable and inevitable clash in America between poor wage and hour workers on the one hand and their typically white collar asset owning and manipulating counterparts on the other.

What is good for the investor is often bad for the person on limited income.

Investors lament deflation because their income and assets will be reduced.  This is understandable and predictable.  If one's income is derived from quarterly dividends on crude oil futures, one doesn't want crude oil to fall in value.

On the other hand, if one subsists on a fixed retirement income or a wage and hour job, he or she prays that crude oil prices will continue to fall, permitting a penurious monthly income to go further.

This inevitable clash in aims, goals, and self-interests will dog America so long as greedy corporate capitalism sets the tone for all things. Capitalism has won every round in the United States for far too long.  She will most likely prevail in the present upheaval.
 
But someday, somewhere, at some time, the masses will waken from their lethargy and rise up against their masters here and in every other society where a moneyed class makes the rules, skims the profits, and arrogantly professes an inherent right to the best of the fruits of society.

Enjoy your hegemony while you can, capitalists.  Your days are numbered.  A fairer and more just order in society is inevitable.

D. Grant Haynes

U.S. Treasury chief says banks must deploy new capital

By Mark Landler - International Herald Tribune
 
October 14, 2008

WASHINGTON: Describing the government's financial bailout plan as "extensive, powerful and transformative," Treasury Secretary Henry Paulson Jr. said on Tuesday that the injection of $250 billion into the nation's banks was needed to restore confidence and avoid a collapse of the financial system.

Speaking shortly after President George W. Bush used similar terms to describe the proposal, Paulson said the Treasury would make $250 billion available to banks to help recapitalize those banks and to get them lending again, among themselves and to businesses and consumers... .

________________________________

"The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'" - Ronald Reagan.

Do you recall hearing Republicans invoking Reagan's name and memory in reverential awe as they railed against "government intrusion" into their self-centered and greed-ridden lives and times?

Do you recall their railing against government welfare programs for the poor with callous and uncaring  "welfare Cadillac" allusions?

Do you recall their accusing Democrats of being tax and spend liberals bent upon foisting socialized medicine and other nefarious schemes upon the nation?

Well, it looks like those old boys have proven themselves to be stinking hypocrites one more time.

Financial industry moguls are lapping at the federal trough now like the alleged baby-making welfare queens they have always mocked.

Apparently, America's fat cats don't mind a little socialism if it will help prop up their capitalistic world of excess.

D. Grant Haynes

Oil below $87 on global recession fears

October 9, 2008

VIENNA, Austria--Oil prices dipped below $87 a barrel Thursday with the downward momentum slowed somewhat by continuing chatter from OPEC nations about an emergency meeting to address the market slide.
 
Light, sweet crude for November Delivery fell $1.97 to $86.98 a barrel in morning trading on the New York Mercantile Exchange, after fluctuating between positive and negative territory earlier in the day.
 
The contract fell $1.11 on Wednesday to settle at $88.95 after earlier edging below $85 - a key technical level that some traders believe could lead to another plunge.

Crude has shed about $60 - or 40 percent of its value - since soaring to a record $147.27 on July 11. The massive losses come as a global financial downturn forces people and businesses everywhere to cut back... .
 
"Overall demand for oil fell for a fifth straight week and year-on-year demand fell for a 24th straight week" this year, noted trader and analyst Stephen Schork in his Schork Report. "In fact last week demand ... fell to the lowest level since the week following the 9/11/2001 attacks."

Demand for gasoline was also weaker, falling 5.3 percentage points over the four weeks ended Oct. 3 compared to the same period a year earlier, according to the EIA report... .
 
________________________________

Can anyone explain to me why I should identify with hand-wringing New York Mercantile Exchange traders, shareholders, and analysts who are crying about sliding crude oil prices?

Like millions of other Americans, I subsist on a limited but fixed retirement income.  That income is in no way linked to the vagaries of Wall Street or any commodities exchange.  There are no portfolios in my life.

Should crude oil prices continue to slide because an economic downturn has produced a glut in inventories, my gasoline may eventually cost less than the present $3.50 a gallon I am forced to pay when gassing up my old truck with as much as a $20 bill will buy.

So, why are falling crude oil prices not good news for me?

Why should I give a damn that men and women who can afford to hold blocks of crude oil futures--or the commodity traders with whom they are in consort--are wringing their hands because they, as members of corporate capitalism's investor class, will see smaller quarterly dividends or commissions next time around as their commodity of choice loses value?

What is that to me?

Many middle class Americans and most economically deprived Americans are forfeiting their homes, health, lifestyles, and dignity to buy gasoline each week.

Yet, when natural market forces--the law of supply and demand--suggests that gasoline prices may fall, we are subjected to endless lamentations from the investment sector about the calamity that falling crude prices represents.

Calamity for whom?

What is good for a free market capitalist is often bad for the rest of us.

But they would seek to persuade me that I am simply too ignorant to understand that what is good for them is actually good for me too.

I reject a lifetime of brainwashing by corporate capitalism's spokespersons and cheerleaders who are always peddling their trickle down horse and sparrow economic theories.  As with a humble sparrow that hopes to find a few oat grains in a horse's waste, a poor person in America is expected to be ever so grateful for any little economic mite that trickles down from an investment capitalist's excesses.

I can't see that from my perspective here in Podunk.

When gasoline retreats to $2, that will be good for me by any measure.  I might even be able to drive to my regional commercial center again after half a year of penury.

And when I go, I will not care one whit that NYME spokespersons and analysts are crying over lost fortunes.

Better they lose their fortunes than I lose my rusty wheels.

Dow plunges 679 to fall to lowest level in 5 years

The Associated Press - Oct. 9, 2008
 
NEW YORK (AP) - Stocks plunged Thursday, sending the Dow Jones industrial average down 679 points - more than 7 percent - to its lowest level in five years... .

_______________________________

George W. Bush, you ignorant and incompetent creep, it took you (and stupid Americans who permitted you two terms in office) eight years to bring my nation to her knees, but you've done it.

If I accepted the myth of an Antichrist, I would be absolutely certain you are that entity personified.

How many more days will you be in Washington?  Surely, not more than 90 now.

God speed the happy day in January 2009 when you are no longer president of my country.

D. Grant Haynes

25% of Wild Mammal Species Face Extinction

By Juliet Eilperin
Washington Post Staff Writer
October 7, 2008

BARCELONA, Oct. 6 -- At least a quarter of the world's wild mammal species are at risk of extinction, according to a comprehensive global survey released here Monday.