[mos6507]

Just found th is gem. Richard Heinberg was aware that a financial crash could really alter future predictions.

What if the global economy tanks because of the US debt burden before the absolute oil peak, thus dramatically reducing demand for a few years?

LINK

[mos6507]

You seem obsessed with the notion that peak did not cause this meltdown.

It's not a notion. It's a fact. Of course, if your whole philosophy of the universe revolves around peak oil then you'll superimpose it onto places it doesn't belong. Widen your horizons enough to accept the fact that there is MORE than one way to crash an economy besides high energy prices.

[vision-master]

bc moss said so?

[mos6507]

Why is it a fact?

For reasons that are obvious to everyone except peakers in the throes of depression over the fact that peak oil doom has been temporarily denied.

Here we go one more time around the mulberry bush.

Dot com crash
Fed lowers interest rates
Real estate market sells the idea of housing as a new way to invest
Lack of regulation of the financial markets creates the toxic derivative markets that are spread out across the entire globe
Lax lending standards opens the floodgates for anyone with a pulse to get a zero-down ARM
People use their house as an ATM
People flip their houses for an easy buck, causing rampant house inflation
During this whole process, the Fed cheerleads the way real estate has saved us from the full recession we would have had from the dot com crash.
ARMs start resetting, but houses are beyond affordable even with these crazy loans. They can no longer find any suckers to flip to. People start to go into foreclosure.
And the rest, they say, is history.

But no, this is all too complicated for a peaker to accept. It all has to be simplified down to "peak oil". Huh? Peak oil had nothing to do with any of the above. In fact, energy costs were creeping upward during the entire housing boom! And with energy costs down, the crash is continuing apace. But no, we have to frame peak oil as the perp because well, otherwise we'd have nothing to talk about while we go through this lull.

What I put into the OP, even everyon'es peakoil guru Richard Heinberg conceded that there was a debt timebomb waiting to go off that could throw off the peak oil doom timetable. Why can't everyone else also accept this?

[mos6507]

I am not lobbing insults at all peak oilers. I am not attacking the peak oil concept. I am only attacking the idea that peak oil caused the credit crisis. I've listed the causes that preceded the credit crisis. Housing was a ponzi scheme. There was nothing natural about it other than the fact that people fall into these sorts of manias rather often. The reason the credit crisis wasn't restricted to just the US was that the derivatives market is a global market. Also, the world economy is so tightly coupled in general that the fall of the US reverberates regardless.

So far I've not been given any concise and specific linkage between peak oil and the credit crisis. The only thing you can really point to is that exurban commuters were paying more to get to work. That was A factor. It wasn't THE factor, because of all the other key events leading up to this perfect storm. If you removed it as a factor, the housing bubble would still pop, and indeed now with energy cheap again, the bubble is still popping. People are still unable to pay their ARM reset mortgages despite a drop in their exurban commuting costs and falling into foreclosure. Not only that, we have TWO MORE WAVES of housing doom to go. (Alt-A and option-ARM).

[mos6507]

Info on the coming ALT-A and Option-ARM timebomb

[SeaGypsy]

While I agree with Moss on the structure of the collapse as being primarily institutional; I will say again that the core issue is market confidence.

Undermined massively by corrupt and unwise investment; the death blow to confidence is peak oil and subsequent turmoil.

[SeaGypsy]

Take away the financial crisis and we still have peak oil; which would cause a global financial crisis.

Take away peak oil and we may not have had a crisis for decades to come.

[TheDude]

Heinberg made a generalized statement that anyone could have formulated, with historic antecedents to back it up too. Not exactly a stunning call. I recently noticed a comment of JM Greer's from 3 years ago predicting that investors would push the price of crude both too high on the upslope and too low on the backside; sound familiar? These aren't very complex formulations.

I haven't seen any published analysis suggesting that tight supply markets were the prime mover in dragging the economy down, outside of Jeff Rubin's. Don't think any of us are, either, pstarr's leaning heavier than most but who are these other Must Be Peak Oil people you're referring to? Sounds like a strawman. High commodity prices were a factor, to what extent remains to be seen. The 80-82 recession wasn't entirely due to Iran going offline, either, as some mistakenly state.

A poll about the effect of $147/bbl's effect on economies would be useful. Give at least 4 options, too, for nuance.

I've always been puzzled by people who fear that peak oil won't be recognized as the big factor in civilization's descent. It's like listening to people vehemently defend or attack a pro sports team, in fact, maybe it's directly analogous in some fashion. I've never understood the attraction there, either.

[threadbear]

The collapse in the price of oil was probably a more significant factor than the rising price, in the financial downturn.

[mos6507]

Heinberg made a generalized statement that anyone could have formulated

Except for certain irrational peakers who feel that anything that happens in the economy post 2005 has to be due to peak oil.

[s0cks]

Mos is right.

High oil prices did not cause the economic crash. While prices were high we didn't have shortages, we didn't have panic, most people could still afford it even if they were grumbling.. What we did see were the beginning effects. Increased costs generally, bankrupt airlines, and crap SUV sales, but I don't believe it was at a dire point before the crash - had it been another year... then quite possibly.

The financial crash had also been predicted well in advance of really high oil prices by some economists (who would not have factored in oil prices). Its was inevitable. Just a question of when.

This crash has delayed the effects of peak oil. For how long? I don't know. It depends just how far we crash. But rest assured, when things do recover, it will hit a brick wall very very soon after.

[TonyPrep]

There is little doubt that high oil prices (brought about by constrained production, relative to consumption) could have been a factor in precipitating this recession. Mos even agreed with that:

The only thing you can really point to is that exurban commuters were paying more to get to work. That was A factor.

Inflation was starting to rocket up as a result of high oil prices and maybe some were finding it harder to keep up loan and mortgage repayments, especially as interest rates were edging up in some countries, in an attempt to control inflation, thus adding to some people's cash flow problems.

There's also a case to be made for saying that, prior to the rapid ratcheting up of oil prices, fairly cheap abundant energy fuelled some of the bubbles that burst so spectacularly.

So I think oil had a part to play and I don't think anyone really denies that. The differences are just in degree.

[Battle_Scarred_Galactico]

Moss is technically correct, but as always with PO issues everything is linked to the overall complete unsustainability of industrial civilization.

Peak Oil
Financial Ponzi System (which caused this)
Overpopulation

All different sides of the same doom-laden coin.