Good Economic News

RedRedemption · Mar 8, 2013

Northside Storm said: ↑

wut

Republicans have spent the past years decrying Obama as the sole reason for GDP descent.

I think people need to apply their logic consistently. Either the president has an impact on macroeconomics, or none at all (I lean more towards the latter, though there are subtle differences that can allow for some influence).
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The president has almost no impact.
Congress has some impact, but the majority of the burden lies on the free market.
Business cycles are cyclical (obviously) in nature. Why the hell are we blaming/and giving credit to presidents when they have such little impact?

peleincubus · Mar 9, 2013

A_3PO said: ↑

If Romney had won they would be giving him all the credit for the turnaround.
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Yeah and it would not be for any specific reason. But mostly because all of the Producers in the country would once again have confidence to hire workers because once again a fine republican sits in the whitehouse.

Invisible Fan · Mar 10, 2013

These seem like baby steps.

Classic · Mar 25, 2013

Great article about long term possibilities of the US economy and ramifications of energy independence. Thought i'd share.

Bolded some highlights though it would appear we're behind the education curve necessary to make it happen.

MSNNBC said:

ENERGY BOOM BEGINS TO RIPPLE THROUGH US ECONOMY

The boom in new oil and natural gas flowing through U.S. pipelines is beginning to ripple through the wider American economy.

Just ask Edrick Smith.

In September, Smith traded temp agency jobs for full-time employment with Baltimore-based Marlin Steel Wire Products, which makes wire baskets for industrial customers. An experienced machinist, Smith is now expanding his skills by learning to set up and operate factory robots.

“Knowing each and every machine in here gives me an opportunity to make good money, and to educate myself more,” he said. “This is my career.”

Smith’s hiring was just one of thousands of openings created indirectly by a new boom in domestic oil and natural gas drilling – a bounty so rich that it has even caught energy industry insiders by surprise. In part 2 of our four-part “Power Shift” special report, we examine how the explosion in drilling in places like North Dakota and West Texas is spreading through the general economy – despite controversy over the potential environmental impact of the new industry practices.

Marlin Steel Wire, for example, has expanded its payroll and invested in high-tech equipment to keep up with a steady pick-up in orders from other U.S. manufacturers. Orders are rising, said owner Drew Greenblatt, because his customers are receiving a widening discount in the price of natural gas and electricity.

“That’s making U.S. companies that used to be at a price disadvantage now uniquely positioned to win contracts they never won in the past -- or haven’t for a while,” he said. “Everyone talks about what’s going on in North Dakota, but it’s filtering down now to conventional factories throughout America."

Some analysts believe the energy cost savings for businesses, factories and consumers will last for decades.

“This is not going to be a one- or two-year thing,” said Ross Eisenberg, head of energy and resources policy at the National Association of Manufacturers. “We’re going to see lower natural gas prices for a long, long way into the future.”

Booms, busts and booms

Since the first gusher of oil spewed from of the ground above the Spindletop salt dome outside Beaumont, Texas, more than a century ago, the U.S. energy industry has enjoyed its share of booms and busts. After peaking in the early 1970s, U.S. oil and gas production began to decline as thousands of depleted wells were shut down. The U.S. rapidly became dependent on foreign suppliers to fuel its economy.

About a decade ago, advanced oilfield production technologies like hydraulic fracturing, or "fracking," and horizontal drilling began to reverse that trend. Many of the now-bountiful fields being brought back on line were mothballed long ago when the remaining “tight” oil and gas deposits were considered too costly or technically difficult to produce.

“It is a sizeable opportunity,” said John Larson, an economist with IHS Global Insight. “It’s a game changer.”

The economics of production have also played a role in the boom. A tripling in the market price of a barrel of crude over the past decade supports widespread use of costly extraction methods that didn't make sense when energy prices were lower.

Barring an unanticipated setback, so-called “unconventional” oil and gas production is expected to continue to grow over the next two decades. Over that period, the industry is expected to make more than $5 trillion in new capital investment that will support more than 3.5 million jobs by 2035, according to the financial analysis firm IHS Global Insight.

That economic impact of such spending already is spreading, especially to companies that rely heavily on natural gas as a raw material or energy source and investing and hiring.

Steel makers, for example, benefit from both the lower cost of manufacturing and from strong demand for steel pipe used for oil and gas drilling. Companies in the steel rustbelt of Pennsylvania and Ohio are polishing up aging plants to replace coal with cheaper natural gas. Others are setting up shop closer to major gas distribution hubs like Louisiana, where steel giant Nucor is investing $750 million to fire up a new plant later this year.

Chemical, plastics and fertilizer makers, who rely on natural gas both as a raw material and an energy source, have also been expanding production. Last year, Dow Chemical announced a $4 billion investment in facilities, part of some $15 billion in expansion plans announced by Gulf Coast chemical makers. And Vancouver-based Methanex Corp. decided last year to spend $425 million to disassemble an idled methanol plant in Chile and move it lock, stock and pipeline to Louisiana.

In December, economists with UBS bank tallied some $65 billion in announced construction of new plants related to cheaper natural gas, and said another 11 plants had been announced worth billions more.
As groundbreaking on these projects gets under way, the dividends from the energy boom will flow even further – to construction companies, engineering firms, materials and equipment suppliers and lenders who help finance the projects.

That, in turn, will help shore up state and federal budgets. The added revenue – from income taxes on new jobs created, corporate taxes on added oil and gas profits and state and federal royalty payments – could top $2.5 trillion through 2035, according to IHS Global Insight.

Though prices at the gas pump have remained stubbornly high -- primarily because stepped-up U.S. production makes up relatively small percentage of the global supply, which drives oil prices -- American households are also getting a big break on the lower cost of natural gas and electricity. Larson, the IHS economist, estimated that the energy “dividend” amounts to about $1,000 a year per household and will double by 2035.

“It’s a fairly substantial return of wealth to the American consumer," he said.

Increased U.S. oil and natural gas production also promises to help rebalance the long-running trade gaps that have weakened the dollar. If the U.S. moves from a net importer to a net exporter of energy over the next decade, as some experts project, oil will flip from being a source of trade deficits to an important contributor on the positive side of the ledger. With China’s energy-hungry economy expected to continue to rely on imported oil, some analysts believe Beijing may soon begin swapping its huge pile of U.S. Treasury bonds for barrels of West Texas crude.

America’s growing energy independence also has been fueled by gains in efficiency: U.S. vehicles are squeezing more mileage from every gallon of fuel, and high-tech heating and cooling units and green building techniques and materials have cut energy bills for commercial and residential buildings by 10 percent since 2005.

Challenges remain

To be sure, there are forces that could delay – or even derail – the ongoing energy boom. The drop in natural gas prices has already slowed production of some projects that become too costly when gas prices are too low.

Lower oil prices could have the same impact, but it’s not clear that added U.S. supplies will be sufficient to make a dent in global oil prices, especially if OPEC producers like Saudi Arabia throttle back on supplies to maintain current prices.

But some experts are more bullish on the prospects for a second energy windfall as increased U.S. supplies of oil rein in global prices. Citibank analyst Edward Morse thinks that by the end of the decade, added U.S. output will pull global crude prices back down to a range of $70 to $90 a barrel – a savings of as much as 30 percent.
That kind of price drop would further amplify the economic boost from lower natural gas prices already flowing through the economy.

Last year, for example, the U.S. consumed roughly 7 billion barrels of oil at an average price of about $100 a barrel. A 30 percent discount on that oil bill works out to about 1.3 percent of gross domestic product. In an economy growing at roughly 2 percent a year, the impact of that dividend would be substantial.

Other factors could slow development. Widespread environmental concerns about the impact of hydraulic fracturing on water supplies have delayed drilling of the Marcellus shale field in New York, where the state Assembly recently voted to extend a moratorium for another two years. In California, the state Legislature is considering at least eight bills to regulate expanded production in the Monterey shale field, estimated to be one of the largest deposits in the country.

Oil and gas producers also face a looming labor shortage as a generation of petroleum engineers and geologists approach retirement age. Their departure is compounded by a dearth of trained younger workers to take their places. From a peak of 11,000 students enrolled in geology and petroleum engineering programs at 34 universities in 1983, only 1,500 were enrolled in 17 programs by 2004, according to a 2007 report from the Interstate Oil and Gas Compact Commission.

Finally, transportation bottlenecks have already slowed the distribution of new energy supplies and could further slow future expansion. Expanding the existing pipeline network, which was planned and constructed decades ago, long before new drilling techniques rewrote the U.S. energy map, is already raising safety and environmental concerns.

The most visible controversy – construction of the proposed $7 billion Keystone pipeline through the nation’s heartland – could be the opening round of ongoing local battles over the build-out of the network required to get new supplies of oil and natural gas from producer to consumer.

“We imported natural gas this winter to the Northeast because we don’t have the capacity yet to move the gas where we need it,” said Larson. “As a country, we need to address the issue of how we develop the infrastructure we need to enable this energy to flow to where it’s needed.”

http://www.nbcnews.com/business/eco...through-us-economy-1C8877092?ocid=msnhp&pos=1
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rimrocker · Mar 25, 2013

"Good beer, good fresh healthy food for all, homes and apartments for all that are well made, well designed, comfortable, durable and handsome; quick easy urban transit systems; good continental passenger train service; air that’s fit to breathe, water that’s fit to drink, food that’s fit to eat; and now and then, when we want it, some space and solitude and silence. Is that too much to ask of a sane and rational political economy? God only knows it’s too much to ask of the one we’ve got now."

--Edward Abbey

mc mark · May 14, 2013

thx Obama

Report: Deficit now shrinking rapidly

WASHINGTON (AP) — A new government estimate says the budget deficit for the current year will come in well below what was projected just a few months ago.

The Congressional Budget Office study predicts a 2013 budget deficit of $642 billion, more than $200 billion below its February estimate.

CBO says higher tax revenues and better-than-expected bailout repayments by mortgage giants Fannie Mae and Freddie Mac are the key reasons for the improved outlook.

The deficit picture is expected to continue to improve next year and beyond, with the 2015 deficit now projected at $378 billion, just 2.1 percent of the economy.

Classic · May 14, 2013

LOL, one of those links from the bottom of the page:

Schiff: 2/3 of America to Lose Everything Because of This Crisis said:

A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.

That's according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.

"I think we are heading for a worse economic crisis than we had in 2007," Schiff said. "You're going to have a collapse in the dollar...a huge spike in interest rates... and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it."

Schiff says that, despite "phony" signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed's never ending money printing.

Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That's about $85 billion per month against a budget deficit that is about the same level.

According to Schiff, these numbers are unsustainable. And the Fed has no credible "exit strategy."

Eventually interest rates will rise... and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

"The crisis is imminent," Schiff said. "I don't think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems."

"We're broke, Schiff added. "We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out."

Schiff points out that the market gains experienced recently, with the Dow first topping 14,000 on its way to setting record highs, are giving investors a false sense of security.

"It's not that the stock market is gaining value... it's that our money is losing value. And so if you have a debased currency... a devalued currency, the price of everything goes up. Stocks are no exception," he said.

"The Fed knows that the U.S. economy is not recovering," he noted. "It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode."

....

http://moneymorning.com/ob-article/schiff-us-will-win-currency-war.php?code=3243
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Deckard · May 14, 2013

Schiff is the CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in New York City, and of course he's attempting to scare people. That makes precious metals rise, along with his profits.

Classic · Jul 18, 2013

Just to send something different to the top of the forum.

Some positivity:

Booming US oil production may be just beginning said:

A new report says increases in shale output surpass official estimates and will soon make the country No. 1 in the world

7/18/13

The U.S. is at a historic crossroads when it comes to domestic oil production, which could surpass even some of the most optimistic forecasts.

In testimony this week before the Senate Committee on Energy and Natural Resources, Adam Sieminski, the head of the U.S. Energy Information Administration, reported domestic oil production was at 7.4 million barrels per day as of April -- its highest level since October 1992.

Leonardo Maugeri, a former senior executive at Italian oil giant Eni (ENI +1.02%), is a fellow at the Belfer Center for Science and International Affairs at Harvard's Kennedy School of Government. Last month he issued a paper on the U.S. oil shale boom after analyzing data from more than 4,000 shale wells and from about 100 oil companies involved in shale oil exploration.

According to his findings, the U.S. may end up producing 5 million barrels of shale oil daily by 2017, becoming the world's largest oil producer as it churns out up to 16 million barrels of oil per day, including shale, conventional, liquefied natural gas and biofuels.

"The nature of shale oil production makes it particularly suited for the United States' industrial, financial, demographic, and geologic landscape," notes a Belfer Center policy brief on Maugeri's paper. "These same characteristics make the expansion of the shale phenomenon to other parts of the world improbable -- at least in the short term."

Indeed, Sieminski noted in his recent testimony that the rate of onshore oil production in the lower 48 states has been remarkable, rising to more than 2 million barrels a day, an increase of 64%, just between February 2010 and February 2013. During that period, Texas more than doubled its oil production, while North Dakota nearly tripled its output.

But Maugeri acknowledges that oil production will always depend on oil prices and that his forecast assumes the price will hold steady or perhaps decrease slightly. "If the oil price drops to below $65 per barrel," the brief says, "production could drop off substantially."

And, whether consciously or not, the brief's comparison of conventional and shale oil production seems to bring up questions about whether this boom in production is just that -- a boom, perhaps to be followed by a bust.

"Conventional oil production requires a high upfront cost, and wells have a long production life" of 30 years, it notes. "Shale oil is quick and relatively cheap to start up and has continual costs and a short production life (1 year). New wells come on line all the time and can be brought off line if the price of oil falls."

http://money.msn.com/now/post--booming-us-oil-production-may-be-just-beginning
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bingsha10 · Jul 19, 2013

From latest Ben Bernake congressional testimony

"If we were to tighten policy, the economy would tank."
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http://www.couriermail.com.au/business/breaking-news/no-rate-rise-on-horizon-bernanke/story-fnihsevj-1226681221841

Sounds like a fundamentally sound economy to me

SamFisher · Jul 19, 2013

bingsha10 said: ↑

From latest Ben Bernake congressional testimony

http://www.couriermail.com.au/busin...horizon-bernanke/story-fnihsevj-1226681221841

Sounds like a fundamentally sound economy to me
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Sounds like a clueless gibe from an inflation truther to me.

bingsha10 said: ↑

there already is tons of inflation. Its just all sitting in bank vaults. CPI doesn't measure that because it hasn't affected the economy yet. Until the fed goes in and burns all that money (yea right) I'm worried.
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Has it effected the economy yet? This was you 4 years ago btw.

Seriously could you possibly be more wrong about anything? Your posts on this subject are a veritable cornucopia of bad (and by bad, I mean EXACTLY THE OPPOSITE THING HAPPENED) predictions:

bingsha10 said: ↑

Obama's "stimulus" is going to ruin the economy because of the big time inflation necessary to pay for it.
.
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peleincubus · Jul 19, 2013

This country needs 8 years of jeb bush. Another recession and then eight years of a democrat. Things happen in threes you know.

mc mark · Oct 30, 2013

And while the Rockets win their opener and people swoon over a website. Mr. Obama continues to do the work.

U.S. Budget Deficit Down To $680 Billion, Lowest In 5 Years

WASHINGTON (AP) -- For the first time in five years, the U.S. government has run a budget deficit below $1 trillion.

The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That's the smallest imbalance since 2008, when the government ran a $458.6 billion deficit.

otis thorpe · Oct 31, 2013

mc mark said: ↑

And while the Rockets win their opener and people swoon over a website. Mr. Obama continues to do the work.

U.S. Budget Deficit Down To $680 Billion, Lowest In 5 Years

WASHINGTON (AP) -- For the first time in five years, the U.S. government has run a budget deficit below $1 trillion.

The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That's the smallest imbalance since 2008, when the government ran a $458.6 billion deficit.
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they take stuff away, Obama works with it. very pragmatic

I like Hilary, Obama's handling of the obstructionists and how he's very proficient of his situation I think is a model for presidents for the near future. this opposition won't stop with any democrat. I don't think Hilary will be ready.

robbie380 · Oct 31, 2013

mc mark said: ↑

And while the Rockets win their opener and people swoon over a website. Mr. Obama continues to do the work.

U.S. Budget Deficit Down To $680 Billion, Lowest In 5 Years

WASHINGTON (AP) -- For the first time in five years, the U.S. government has run a budget deficit below $1 trillion.

The government says the deficit for the 2013 budget year totaled $680.3 billion, down from $1.09 trillion in 2012. That's the smallest imbalance since 2008, when the government ran a $458.6 billion deficit.
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It's even better when you view it as a percentage of GDP. The deficit is now down to 4.1% of GDP. It's amazing how some people fail to acknowledge that deficits are shrinking rapidly due to efforts from both sides with tax increase and spending cuts.

bigtexxx · Oct 31, 2013

why does the labor participation rate suck so bad?

larsv8 · Oct 31, 2013

bigtexxx said: ↑

why does the labor participation rate suck so bad?
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Because trickle down doesn't work.

robbie380 · Oct 31, 2013

bigtexxx said: ↑

why does the labor participation rate suck so bad?
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Mainly because younger people are staying in school longer or going back to school.

otis thorpe · Nov 9, 2013

bump 200k private jobs added

RoxOn RoxOff · Nov 9, 2013

otis thorpe said: ↑

bump 200k private jobs added
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you're very active in these threads. what is your background? just out of curiosity. i was an economics major in college so i appreciate these discussions.

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