Tuesday, January 3, 2012

Last Call

Iran's hijinks in the Strait of Hormuz is going to cost you at the pump this week as oil is now back above $100 a barrel

Oil prices surged 4% Tuesday, fueled by continued anxiety over Iran's growing threat to shut down the Strait of Hormuz after the Iranian military launched a missile test.

"It's mostly about Iran right now," said Peter Beutel, analyst with energy risk management firm Cameron Hanover. "That's the most bullish factor."

Oil prices jumped 4.2% to settle at $102.96 a barrel. That's the highest closing price since May 10, when prices ended the day at $103.88 a barrel.

The Strait of Hormuz is a critical shipping lane, with 17 million barrels of oil per day passing through in 2011, according to the U.S. Energy Information Agency.

That's about one sixth of global oil production and nearly 20% of all the oil traded worldwide. Iran itself only exports about 2.2 million barrels of oil a day.

Just last week, Iran issued its initial threat to shut the shipping lane linking the Persian Gulf with the Gulf of Oman. Iran's southern coast borders that entire area.

"If Iran oil is banned, not a single drop of oil will pass through Hormuz Strait," Iran's 1st Vice President Mohammad Reza Rahimi said at that time, according to the Iran State News Agency.

Recently, Iran warned that they will "severely react to any threat" if the US carrier John C. Stennis returned to the region after moving out of the Persian Gulf.  Nice to see with US oil refiners exporting record amounts of gasoline overseas that we can continue to get gouged at the pump and continue to deal with record yearly average gas prices because we're sending gasoline to other countries instead of your county.

And still, energy companies make record profits while complaining about "industry-crushing regulations" that they can't afford.  Funny how that works.

The Road To Mumbai

The newest location with a nouveau riche boomlet is India, where the kids prefer Italian sportscars in the "world's largest democracy".

From farmers who swapped fields for cash to 20-something CEOs that inherited the family business, hot new money is flooding India's luxury car market as roaring sportscar engines announce the country's growing wealth on its roads.

No senior Indian executive feels complete without his sleek German-made saloon, while Italian sportscars are the new calling cards for the country's rich young things at exclusive nightclubs that screen guests at the main gate, not at the door.

"There is a rush to luxury," says Mohan Mariwala, managing director of Auto Hangar, surrounded by gleaming Mercedes Benz sportscars in one of his four Mumbai showrooms for luxury cars.

"Farmers, tiny industrial families, the younger generation with different value systems...You can't imagine the kind of people who invest in extremely exotic cars today."

Headline growth in Asia's third-largest economy may be stuttering, but decades of growth has spawned a new upper class with global tastes and aspirations that is driving a $1 billion luxury car market expanding at 40 percent annually, say industry analysts and research firms.

With India's population reaching 1.2 billion, and half the population living on the US equivalent of about a dollar a day, it's no wonder that the "one percent" there is looking to flash some cash.  Income inequality may be awful in the US, but there are countries where it is far worse and it remains so.

An Inch Of Snow And The World Collapses

Kentucky drivers really are just absolutely terrible.

Two pileups involved dozens of cars on Interstate 75 on Monday.

Kenton County police said 41 vehicles were involved in a pileup just north of Crittenden at mile marker 167.That pileup left eight people injured.

Six people were hospitalized with injuries that were not considered life-threatening.

Officers said 23 of the vehicles were so badly damaged in the wreck they had to be towed away.

Another pileup occurred near Dry Ridge. Police said this was actually three separate crashes involving more than 30 vehicles.

Between the two pileups, Interstate 75 was closed for more than four hours.

And that's just south of here.  I'm glad I had the day off, that's all I'm saying.

This Is What Hero Looks Like

BOULDER, Colo. -- A Colorado man who was killed when a 3-foot tree branch flew through his windshield and impaled him in the chest was able to steer the car to safety before losing consciousness.

The wife of 61-year-old James Baker-Jarvis told the Daily Camera ( http://goo.gl/WsaHg ) that her husband was able to pull the Subaru Outback over to the roadside, saving her from any injury. Baker-Jarvis died later at a hospital.

Baker-Jarvis was a theoretical physicist at the National Institute of Standards and Technology. His wife said that he had hoped to one day bicycle across America.

"He loved to be outside," Karen Baker-Jarvis said.

Imagine your last thought being saving the person next to you. He was an educated man. He knew the situation, and without hesitation he did the right thing. May we all have such grace and strength if faced with such a dire situation.

The article mentions other wind-related injuries, which gives a new respect for something we usually scoff at.  Drive safe, folks.

My Cats Must Never Know This Exists

From the Too Freaking Cool files:

A man brushes his cat remotely with the help of some modern tools and a very small robot.  It's pretty cool watching him get his bearings after watching through the RoboCam, and handles the brush.  The cat seems to enjoy it (mostly).

It's not just impressive, it's something that cats all over the world would demand. Here is a link to the full article.

Classifying The Middle-Class

Reuters columnist David Rohde asks a pretty important question:  Who is the American middle class, and what does being middle-class mean?

Despite the incessant political lip service paid to the middle class, there is no official American government definition of the group. The middle class has been intensively studied but no political consensus exists over how it was created or how to strengthen it. Liberals credit government programs with helping create a thriving American middle class after World War II. They cite the G.I. bill, home mortgage interest deduction and state university system as examples. Conservatives credit unbridled, American free market capitalism with the feat. I believe it was both.

Within weeks of taking office, the Obama administration’s launched its own effort to help the group. Chaired by Vice President Joe Biden, the “Middle Class Task Force” was launched in January 2009 and includes the secretaries of labor, health and human services, education and commerce.

The closest the task force came to defining the middle class was a January 2010 report “Middle Class in America.” The study never gives an exact income level that is “middle class.” Instead, echoing academic studies on the subject, the document concludes that “middle class families are defined more by their aspirations than their income.”

The report lists typical American middle-class aspirations as “home ownership, a car, college education for their children, health and retirement security, and occasional family vacations.” Obtaining these goals is harder for middle class American families than it has been in decades, the report argues, because the cost of health care, higher education and housing have risen far faster than wages.

In academia, various definitions of the middle class are used. Economists generally use income as the determinant. Using census data, they break the American middle class into quintiles — groups of twenty percent — and declare the middle sixty percent of Americans the middle class. As I said in an earlier column, this is the definition I use. Based on 2010 census data, the middle class would be the sixty percent of Americans with household incomes from $28,636 to $79,040 a year.

The fifty percent mark is right around $43,000 a year in income, if you're wondering.  Thirty years ago that would have been a fortune.  Now?  Considering the price of cars, healthcare, and college, that's not a lot of money at all.  Even housing, as bad as the market has bombed, still finds most Americans are priced out of a mortgage (especially with what banks now want for a down payment.)   So yeah, that payroll tax cut putting $1,000 in the pockets of those making $50,000 a year?  That's a damn lot of money to the 56% of us making that or less in a year.

No wonder the GOP backed down on it.

Iowa-nder Who Will Win?

The most useless political beauty contest of the year gets under way today, and final polling out of PPP shows a 3-way race among the government-hating bigot, the spineless millionaire, and the frothy God-botherer

The Republican caucus in Iowa is headed for a photo finish, with the three leading contenders all within two points of each other.  Ron Paul is at 20%, Mitt Romney at 19%, and Rick Santorum at 18%. Rounding out the field are Newt Gingrich at 14%, Rick Perry at 10%, Michele Bachmann at 8%, Jon Huntsman at 4%, and Buddy Roemer at 2%.

The momentum in the race is completely on Santorum's side. He's moved up 8 points since a PPP poll earlier in the week, while no one else has seen more than a one point gain in their support. Among voters who say they decided who to vote for in the last seven days he leads Romney 29-17 with Paul and Gingrich both at 13.

Santorum's net favorability of 60/30 makes him easily the most popular candidate in the field. No one else's favorability exceeds 52%.  He may also have more room to grow in the final 48 hours of the campaign than the other front runners: 14% of voters say he's their second choice to 11% for Romney and only 8% for Paul. Santorum's taken the lead with two key groups of Republican voters: with Tea Partiers he's at 23% to 18% for Gingrich, 16% for Paul, 15% for Bachmann, and only 12% for Romney.  And with Evangelicals he's at 24% to 16% for Gingrich, and 15% for Paul and Romney.

It seems the anti-Romney with the best timing is indeed Santorum, who could very well win this thing.  Of course, four years ago Mike Huckabee won in Iowa, and he promptly crashed and burned as everyone threw their support behind John McCain after his win in New Hampshire.  On the other hand, Barack Obama won Iowa in 2008, and that ended up putting him on the map...and eventually in the White House.  You can't say Iowa is meaningless, although for Republicans, South Carolina is the primary that seems to flag down the eventual winner.  The Palmetto State has picked the eventual GOP nominee every year since Reagan in 1980.

And Newt Gingrich had a commanding lead there before Christmas.  Now?  Who knows.  But today at least, we'll find out if Romney can win...and what the GOP base's reaction will be if he does.  If he doesn't win (and the polls show he could end up third or even fourth behind Gingrich) things get very interesting going into New Hampshire, where Romney has a 26 point margin.  If Romney doesn't win in Iowa, and finishes worse than second (very, very possible) and whoever does win in Iowa comes in second in New Hampshire, things get really crazy.

We'll see what happens today.  My gut says Romney won't win here.


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