To ruin and otherwise.

It is good for perspective to go outside and do something every now and then; perhaps to drive from New Orleans to Virginia. The task is to build a tropical plant habitat for a friend and to do so before the petroleum shite hits the fan and nobody can go anywhere except on foot, horse or bicycle.

I did go to bicycle shop and look inside.

Noted:

– Green shoots, indeed. The gasoline guzzling, nature- raping machine known as the United States is running full blast (Minus fifteen percent off the bottom). Six- lane interstates between towns ‘X’ and ‘Y’ are jammed with cars and every conceivable variety of 18+ wheel truck. All are going fifteen or more miles per hour over the speed limits. As the American public heads for its date with economic ruin, it does so ‘pedal to the metal’.

– I see Zero Hedge has picked up on the delayed but not denied ultimate obliteration of GM/Chrysler:

Finally someone is sticking against the taxpayer rape going on behind the scenes each and every day in bankruptcy court (even if it is paradoxically the government itself), in which taxpayers directly pay Wall Street’s investment banks who pretend to facilitate Obama’s pet UAW-placating and merely liquidation-delaying projects.

– The $68 – 72 oil price resistance level seems to be holding. If prices moved above that level, then a much higher price would be suggested, perhaps $90 a barrel. It would seem that $70 is the new $135 and the country is too poor to afford oil over $100. The upshot is that oil over $45 is what is killing the economy, eating it from within.

– Nouriel Roubini presents a number of summaries which suggest overall declines in output for this year with next year being clouded with uncertainty:

A Significant Global Growth Contraction in 2009, But What Path for 2010?

Consensus now suggests global real GDP growth will contract in 2009. Analysts however are divided about whether the recovery will begin in the latter half of 2009 or be delayed until 2010. Public and private sector analysts began scaling down their forecasts sharply in Q1 2009, but now consensus says that the U.S. might bottom sooner and that Chinese acceleration in H2 2009 could be more pronounced despite weak outlooks for Europe and Japan. Yet international institutions like the IMF are now expecting slightly stronger if still well below potential growth in 2010.

Etc.

Being in the Washington, DC metro area is similar to being in a bubble. Trees and grass are leafy green with all the rain and cool – for Washington – temperatures. The highways are jammed with cars and Sunday traffic is a form of rush hour. A trip to Springfield Mall is a bracing dose of reality; half the stores are boarded up. A store I was offered a chance to build- out four months ago is open … and sporting a ‘60% Off Clearance!’ sign. Not good.

As for uncertainty, there is little here @ Economic Undertow. The concept for the future is less. It will be easy less (with some leadership, prosecutions, un– bailouts and conservation) or hard less. Gasoline prices will hold steady or increase as ‘fools’ demand’ presses against supply … then, foreign exchange constraints. California will default and the sickening pitch over the edge of the abyss will start again. The oil price ‘spike’ will prove to have been a speed bump, but enough to derail the ‘recovery’. Unfortunately, due to the hubris of the authorities, there is little fiscal or monetary ammunition left for the authorities to call upon.

They will run around in circles like headless chickens wondering what happened. “Credit is nationalized!” they will cry. “The banks are nationalized or on life support. Sub- prime mortgages have mostly defaulted!” The credit/securitization/equities bubbles are burst. There are no easy answers …

It’s the oil, stupids!

Welcome to ‘Post- Peak America Blues’!