Morning Report – Oil continues to fall 12/12/14

Posted on December 12, 2014 by Brent Nyitray

Markets are lower this morning as oil continues to fall. Bonds and MBS are up, with the 10 year hitting lows not seen since June of 2013.

Lower energy prices means that inflation at the wholesale level is pretty much non-existent. The producer price index fell .2% in November. Ex food and energy, it was flat.

Declining gas prices pushed the University of Michigan Consumer Confidence level to 93.8 from 88.8 last month. We appear to be back to normalcy.

The left is still up in arms over the language in the CROmnibus (continuing resolution + omnibus spending bill) that allows banks to trade derivatives in their FDIC insured entity. I haven’t seen the specific language, but I think it allows the banks to use derivatives for hedging purposes. But there is so much posturing going on here that it is hard to tell exactly what it does. The spending bill did make it through the House, and it looks like a done deal in the Senate.

Net Worth fell by $140 billion in the third quarter, according to the Federal Reserve. Real estate was the bright spot of the report as it rose $167.8 billion.

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22 Responses

  1. lmsinca, on December 12, 2014 at 9:27 am said:

    Brent

    Net Worth fell by $140 billion in the third quarter

    What does that mean exactly and is there a particular segment of the population affected primarily by this? Is it related to oil prices?

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  2. Let the mutherfuker burn!, on December 12, 2014 at 9:28 am said:

    Fascinating.

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  3. jnc4p, on December 12, 2014 at 9:42 am said:

    Interesting observation from Paul Krugman today, but I don’t think he gets the irony:

    “This is what happens when an elite claims the right to rule based on its supposed expertise, its understanding of what must be done — then demonstrates both that it does not, in fact, know what it is doing, and that it is too ideologically rigid to learn from its mistakes.”

    http://www.nytimes.com/2014/12/12/opinion/paul-krugman-greece-economy-mad-as-hellas.html?ref=opinion

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  4. Michigoose, on December 12, 2014 at 9:46 am said:

    FWIW, John/banned is predicting that oil will stay low until April, and possibly until July. Take your road trips while you can!

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  5. Brent Nyitray, on December 12, 2014 at 10:00 am said:

    Lulu, I think they attributed the decline to the stock market. Maybe people sold during the early August sell off?

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  6. novahockey, on December 12, 2014 at 10:24 am said:

    is Ned back at the PL?

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  7. lmsinca, on December 12, 2014 at 10:34 am said:

    Thanks Brent………..too busy this morning to read the link.

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  8. Brent Nyitray, on December 12, 2014 at 10:45 am said:

    The link is just a table – pretty inscrutable.

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  9. Michigoose, on December 12, 2014 at 5:26 pm said:

    is Ned back at the PL?

    Not that I’ve seen; he’s been sighted at Wonkblog and on Salon.

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    • ScottC, on December 14, 2014 at 7:14 am said:

      McWing:

      Bigots

      I wonder if they have a legal case. Probably not because they aren’t a “protected class”, ie the law doesn’t protect all people equally.

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  11. Michigoose, on December 14, 2014 at 10:08 am said:

    Bigots

    I could be entirely wrong, but I’m guessing that none of the gay couples who wanted wedding cakes made also wanted “Traditional Marriage is Wrong” written on the cake. What Shoebait wanted was the equivalent of having a black baker write “Niggers are Thugs” on a cake.

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    • ScottC, on December 14, 2014 at 12:39 pm said:

      Mich’s:

      What Shoebait wanted was the equivalent of having a black baker write “Niggers are Thugs” on a cake.

      Or having a Christian baker write “Happy Marriage to Bill and Steven” on a cake. The point is that if the black baker or the gay baker can legally refuse to produce a cake that offends them, a Christian baker should also be able to legally refuse to produce a cake that offends them. Anyone who supports the right of the first two to refuse but denies the right of the third to refuse is being inconsistent and, frankly, nonsensical.

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  12. Let the mutherfuker burn!, on December 14, 2014 at 11:54 am said:

    Common sense dictates that Tolerance is a one way street, that’s why I linked it with the “Bigot” preface.

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  13. Michigoose, on December 14, 2014 at 2:34 pm said:

    I doubt that the anti-SSM bakers were asked to write anything on the cake. Who writes things on wedding cakes?

    As I’ve stated before, I don’t really have a problem with a baker refusing to make the cake; I think that they’re perfectly justified to do that, but they need to let their potential customers know that right up front.

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    • ScottC, on December 14, 2014 at 3:52 pm said:

      Mich:

      I think that they’re perfectly justified to do that…

      We agree.

      …but they need to let their potential customers know that right up front.

      It may be a reasonable marketing practice, especially if the baker has reason to expect a lot of interest from gay weddings. It would certainly spare both himself and customers some awkward conversations. But I don’t think he should have any legal obligation to do so. Should a gay baker be obligated to let his potential customers know up front that he will refuse to bake a cake for an anti-SSM celebration?

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  14. Michigoose, on December 14, 2014 at 4:07 pm said:

    Should a gay baker be obligated to let his potential customers know up front that he will refuse to bake a cake for an anti-SSM celebration?

    Sure.

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    • ScottC, on December 14, 2014 at 4:42 pm said:

      Mich:

      Sure.

      How?

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      • ScottC, on December 14, 2014 at 7:25 pm said:

        Kevin Williamson hits another home run, this one on the shameless and reprehensible Elizabeth Warren.

        http://www.nationalreview.com/article/394635/its-still-tarp-kevin-d-williamson

        No doubt aware that 99 percent of those who look to her for guidance on financial regulation could not explain what a derivative is, Senator Warren did her usual dishonest shtick, engaging in her habitual demagoguery without ever making an attempt to actually explain the issue, which is a slightly complicated and technical one, to the rubes who make up the Democrats’ base. Angrily insisting that the reform is about nothing more than ensuring that “the biggest financial institutions in this country can make more money” is cheap, and it’s easier than trying to explain why many midsized banks believe that the rule puts them at a competitive disadvantage vis-à-vis the big Wall Street firms, to say nothing of exploring the convoluted question of why agricultural swaps are covered by the rule while interest-rate and foreign-exchange swaps are not. This led Maggie Haberman of Politico to admire Senator Warren’s “authenticity,” the choice of precisely that word being the cherry on this sundae of asininity. Senator Warren is as much an authentic champion of ordinary working people as she is an authentic Cherokee princess — and Mel Brooks and those Yiddish-speaking Indians from Blazing Saddles were more convincing in that role.

        I would bet that one of the reasons Warren doesn’t bother to explain things is because she hasn’t even bothered to understand it herself in the first place. The chances that Warren could adequately explain to anyone what a derivative is is probably close to Blutarsky’s grade point average.

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