The GDPNow model nowcast for real GDP growth in the third quarter of 2015 is 1.1 percent on October 6, up from 0.9 percent on October 1.After a gazillion dollars in stimulus and six years into the recovery, and no evidence of any global warming in 18 years, and the Russians in Syria, the forecast for the US GDP for 3Q15 is a whopping 1.1%. At least it's not a negative number. POTUS, meanwhile, is on his way to Oregon, to talk gun control. And no one in the GOP wants to be House speaker. Welcome back, Mr Speaker.
The model's nowcast of the third-quarter growth rate in real personal consumption expenditures increased 0.2 percentage points to 3.6 percent following yesterday's (October 5, 2015) light motor vehicle sales release from the U.S. Bureau of Economic Analysis. After this morning's international trade report from the U.S. Census Bureau, the model nowcasts of real net exports and real equipment investment each increased modestly.
Thursday, October 8, 2015
GDP Now -- 1.1% -- 3Q15 -- October 8, 2015
As of October 6, 2015:
Welcome Back Kotter, Theme Song
Not Ready For Prime Time; Putin In The Mideast -- October 8, 2015
Updates
May 28, 2016: Russia's long road to the Middle East -- The Wall Street Journal front page "Review" article.
October 9, 2015: CNN has the timeline -- how Putin "took" Syria. Two things stand out: a) Obama's multiple "red lines" that were nothing more than lines in the sand; and, b) SecState Kerry "going off script -- according to the CNN analysis. Obama was seen as a paper tiger, and SecState Kerry gave Putin the opening he (Putin) needed.
October 9, 2015: this is the lead story -- the very top news story -- in today's Los Angeles Times -- Obama to end Pentagon effort to train Syrian rebels.
President Obama has decided to end the Pentagon’s failed effort to field a proxy force in Syria, senior administration officials familiar with the plan said today.
Instead of trying to back a moderate Syrian rebel force that the U.S. would train, the administration will focus on supporting the Kurds and other established rebel groups in the country’s civil war, the officials said.If I remember correctly, the Pentagon spent upwards of $500 million to train five (5) Syrian rebels. I could be wrong on the amount; it was posted a few weeks ago.
Original Post
I'm going to leave it at that for now, but this may become one of the "Big Stories" going forward. Having fixed (permanent) Russian air bases and Russian army bases in the Mideast, I don't think, was on anyone's radar five years ago. I don't think Putin is thinking short term. He's a chess player.
The white Russians may have lost the "Soviet Union," but there's a very, very good chance that something much, much bigger has just been handed to Putin. It might be a good time to review what Alexander the Great might have imagined. Not what Alexander the Great accomplished or did not accomplish or how it all ended for Alex the Great, but what must have been going through his mind as his military was sweeping south and southeast.
Right now, I think, the big questions to be asked are: "how far does Putin plan to go?" "How far will he take this?"
It's hard for me to believe that his political/military planners were strategically planning to take the Mideast ten years ago or five years ago or even two years ago. But if one thinks it amazing that a couple of rogue software engineers could bring down one of the world's largest automakers, imagine what Russian leaders might be able to orchestrate, especially when they have the CEO's backing.
It also couldn't come at a better time. Obama has always been perceived to be very, very weak by Putin, but now Obama is at his weakest, a lame duck. Worse, the US is just at the beginning of a presidential election year. There will naturally be a void in leadership as leaders at all levels move up and down the food chain. The GOP, for example, is seen by mainstream media to be in "disarray" with regard to the House leadership. Political candidates can opine all day long what they would do, but the fact is, they are still candidates and can't do anything for at least a year. That gives Putin a lot of time to solidify his position. Unlike the US which "invaded" a foreign, sovereign nation, Putin did not invade Syria. He was invited.
I don't think this is anything like the Afghanistan "war" for the Russians. This is a whole new ball game.
The "prize" is oil.
Idle Chatter; Commentary In Response To A Reader's Question -- October 8, 2015
A reader asks in a comment to an earlier post:
There are at least two questions being asked. The easy one first: why not, if necessary, subsidize domestic oil industry? Politically it can't happen, especially under this administration. As recently as yesterday President Obama suggested eliminating "subsidies" already in place for the domestic oil and gas industry and "using" that money for intermittent energy (wind and solar). Even under the most conservative administration, subsidizing the domestic oil and gas industry would be the wrong way to go. Taking away some of the regulatory obstacles would be a lot better. Free market capitalism will sort this all out. Low prices have made the industry much more efficient. Some (maybe many) oil and gas companies will not survive but the overall US oil and gas industry will do just fine, over time.
The second question has to do with imports. RBN Energy and others have addressed this very, very well. US refineries were optimized for heavy oil back in the 90's or before, back when US production was "dead" and no suggestion that it was every going to come back. Most of the oil being imported then was heavy oil. Western Canadian oil was also heavy oil and that's why the Keystone was so important -- to continue bringing heavy oil to the refineries along the Gulf coast that were optimized for heavy oil.
Then the perfect storm: the frackers cracked the code on lifting tight US oil; unfortunately it was all light oil and not what the US refiners (except some on the East Coast) wanted or could use. These refiners were holding out for the Keystone to bring heavy Canadian oil; it was way too expensive (billions of dollars) to retro-fit all those refineries to optimize them for light "shale" oil. Those refineries are still optimized for heavy oil -- which US oil is not.
While all the haggling over the Keystone was going on, the refiners jerry-rigged their operations so that with a "mix" of heavy oil and light oil they could make things "just barely" work.
What the US really needs is more imported heavy oil, and that's what is being imported for the most part. Rather than worry about exporting our crude oil in the short time (politically not going to happen), efforts would be better spent to "trade" our light oil for overseas heavy oil (from Venezuela, example). Obviously Venezuela doesn't need our light oil but the global market could come up with a system where trade-offs were made [Venezuela heavy oil to the US; US light oil to Europe or Asia.]
A significant amount of imported Saudi oil is going to the refinery that Saudi Aramco owns along the US Gulf Coast. That, I doubt, will ever stop as long as Saudi has ownership in that refinery.
The one area that is of concern -- and part of your question: recently US refineries on the east coast specifically said they were not going to use any more Bakken light oil (for the time being) because the light oil they were getting from African west coast was less expensive. In a perfect world, the US could have stepped in and targeted West African operators with higher tariffs to protect the Bakken, but trade wars tend not to work out very well.
There is much more that could be written but that's at least a start.
Why do we allow this situation to continue, where US producers are being forced to curtail producing while we are importing very large quantities of crude oil? Would it not benefit our economy to tax imports and if necessary, subsidize domestic oil. I can see a significant reduction in the trade deficit in conjunction with a boost to the economy. What am I missing?My opinion as I would express them if I were having coffee at Cashwise in Williston.
There are at least two questions being asked. The easy one first: why not, if necessary, subsidize domestic oil industry? Politically it can't happen, especially under this administration. As recently as yesterday President Obama suggested eliminating "subsidies" already in place for the domestic oil and gas industry and "using" that money for intermittent energy (wind and solar). Even under the most conservative administration, subsidizing the domestic oil and gas industry would be the wrong way to go. Taking away some of the regulatory obstacles would be a lot better. Free market capitalism will sort this all out. Low prices have made the industry much more efficient. Some (maybe many) oil and gas companies will not survive but the overall US oil and gas industry will do just fine, over time.
The second question has to do with imports. RBN Energy and others have addressed this very, very well. US refineries were optimized for heavy oil back in the 90's or before, back when US production was "dead" and no suggestion that it was every going to come back. Most of the oil being imported then was heavy oil. Western Canadian oil was also heavy oil and that's why the Keystone was so important -- to continue bringing heavy oil to the refineries along the Gulf coast that were optimized for heavy oil.
Then the perfect storm: the frackers cracked the code on lifting tight US oil; unfortunately it was all light oil and not what the US refiners (except some on the East Coast) wanted or could use. These refiners were holding out for the Keystone to bring heavy Canadian oil; it was way too expensive (billions of dollars) to retro-fit all those refineries to optimize them for light "shale" oil. Those refineries are still optimized for heavy oil -- which US oil is not.
While all the haggling over the Keystone was going on, the refiners jerry-rigged their operations so that with a "mix" of heavy oil and light oil they could make things "just barely" work.
What the US really needs is more imported heavy oil, and that's what is being imported for the most part. Rather than worry about exporting our crude oil in the short time (politically not going to happen), efforts would be better spent to "trade" our light oil for overseas heavy oil (from Venezuela, example). Obviously Venezuela doesn't need our light oil but the global market could come up with a system where trade-offs were made [Venezuela heavy oil to the US; US light oil to Europe or Asia.]
A significant amount of imported Saudi oil is going to the refinery that Saudi Aramco owns along the US Gulf Coast. That, I doubt, will ever stop as long as Saudi has ownership in that refinery.
The one area that is of concern -- and part of your question: recently US refineries on the east coast specifically said they were not going to use any more Bakken light oil (for the time being) because the light oil they were getting from African west coast was less expensive. In a perfect world, the US could have stepped in and targeted West African operators with higher tariffs to protect the Bakken, but trade wars tend not to work out very well.
There is much more that could be written but that's at least a start.
Four (4) New Permits, North Dakota; Liberty Resources With A Nice Well; Two More DUCs -- October 8, 2015
Active rigs:
Wells coming off confidential list Thursday:
CLR canceled one permit, a Paca well in Williams County
Four (4) producing wells completed:
29101, see above, Liberty Resources, ND State 158-95-16-9-10TFH, McGregor:
| 10/8/2015 | 10/08/2014 | 10/08/2013 | 10/08/2012 | 10/08/2011 | |
|---|---|---|---|---|---|
| Active Rigs | 68 | 190 | 184 | 193 | 194 |
Wells coming off confidential list Thursday:
- 29101, 762, Liberty Resources, ND State 158-95-16-9-10TFH, McGregor, 35 stages, 3.9 million lbs, t4/15; cum 67K 8/15; see graphic at this post;
- 30439, SI/NC, Hess, EN-Kiesel-LE-155-94-1918H-1, Manitou, no production data,
- 30779, SI/NC, BR, CCU Gopher 1-2-15TFH, Corral Creek, no production data,
- Operators: Whiting (3), Newfield
Fields: Sourth Fork (Dunn), Lost Bridge (Dunn) - Comments:
CLR canceled one permit, a Paca well in Williams County
Four (4) producing wells completed:
- 28982, 823, WPX, Mandaree 24-13 HZ2, Spotted Horn, must have been a DUC, t9/15; cum --
- 28983, 2,222, WPX, Mandaree 24-13HD, Spotted Horn, t9/15; cum --
- 28984, 1,849, WPX, Mandaree 24-13HY, Spotted Horn, must have been a DUC, t9/15; cum --
***********************************
29101, see above, Liberty Resources, ND State 158-95-16-9-10TFH, McGregor:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 8-2015 | 13802 | 2184 |
| 7-2015 | 17664 | 15977 |
| 6-2015 | 6664 | 7447 |
| 5-2015 | 16435 | 945 |
| 4-2015 | 10687 | 0 |
That Didn't Take Long; Russia Launches A Trial Balloon ( er,.. Cruise Missile) -- October 8, 2015
Earlier today I posted:
Tweeting now: OPEC crude oil exports to rise by 430,000 b/d to average 24.07 mil b/d over 4 weeks to Oct 24, UK-based tanker tracker Oil Movements says.
I wonder what an errant cruise missile hitting a Saudi oil field would do to the price of oil? Just asking?Now, just a few hours later, Fox News is reporting that an errant Russian cruise missile hit Iran and not Syria.
****************************
OPEC Exports
Tweeting now: OPEC crude oil exports to rise by 430,000 b/d to average 24.07 mil b/d over 4 weeks to Oct 24, UK-based tanker tracker Oil Movements says.
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