Hurricane Stuff - Part 3

WHEN YOU'RE RIGHT, YOU'RE RIGHT

When I said that I had to go out Monday night to get gas before prices shot up to $2.75, apparently I was wrong. They were at or above $3.00 as I drove around today. And there were freaking lines at the gas stations for the $2.90 gas in Columbia. Boy, did these jokers screw the pooch, but they probably didn't comprehend the fact that gas prices were going to skyrocket until they drove into work and found out that gas prices were about 60 cents higher this afternoon than this past weekend.

It's nice to be an economist and smart. Now, the real question is whether ethanol has gone up that much. I'm going to guess that the price will be around $2.20 or so, mostly because people will be willing to damage their engines to buy lower priced gas, even though their SUVs aren't designed for Ethanol. Haha.

In macro-economics / finance, there's something called cost-push inflation. Basically, what happens is that for some reason, prices rise. Then because people see prices increase, they purchase more before prices increase even more. Then prices increase more because of increased demand. And so on and so forth. So we'll have to see when the cycle ends here... Prices are going up all over the country (according to http://www.southcarolinagasprices.com)
So there's definitely some shenanigans afoot.

The real question is how much is actual supply shock, how much is demand increases due to hording, and how much is gouging. And without knowing what gas stations pay, I'm going to say that there's a good amount of gouging happening. But people are still willing to pay for it.

Still, I'd like to see what Ethanol is going for and see if it's finally economical to go to ethanol with the much, much lower gas mileage. The ethanol board is full of crap when they say that there could be increased gas mileage. But we'll see how that goes this weekend with Labor Day travel. Holy shenikies, gas prices are going to skyrocket. And it's happening close enough that people aren't going to put off whatever plans they had this weekend, including us. But we'll see how crazy prices get.

Hurricane Stuff - Part 2

LET THE GOUGING BEGIN

I thought I was being facetious when I said that I was going to get gas last night before gas reached $2.75. Well, the joke is on everyone else now that prices around here have already began to rise. At the same station I paid $2.40 a gallon last night, is now up to $2.60. Other stations (where I would never buy gas anyway) have already put prices up to $2.70. Still there are other stations that haven't begun gouging yet, especially since I don't think they started running low on gas at this point. So there's definitely some price shenanigans going on, especially with the BP and Sunoco stations. Exxon and Raceway haven't jacked up their prices yet (which is funny to see a station offering $2.38 gas next to $2.60 gas. That will change soon enough. There are already plenty of signs that there's going to be a supply crunch in the next couple of days. And it's not even going to be speculative. It's going to be because the oil refineries are shut down in the south, which is going to make prices in the Southeast very uncomfortable. Everywhere else, prices will rise because retailers can take advantage. There's no "real" reason why prices will go up in the Northeast except that everyone will expect them to rise. Same thing west of the rockies. Oil prices should rise, but the world price of oil shouldn't rise too much except for speculation. And that's exactly what's going to happen here.

However, short of another hurricane in that neck of the woods (or one striking Texas), production will probably be back to normal by the time winter rolls around. That's my guess. However, that won't prevent prices from going up any further. I don't see any major shortages happening either. Though it would be funny if rationing started to happen (suck on that SUV drivers). Anyway, my tank is full and shouldn't have to be refilled anytime in the next week or so, so we'll see if I can weather the storm (no pun intended) without a problem.

Hurricane Stuff - Part 1

HURRICANE STUFF

Someone, let's call him Jeff, just asked me whether the hurricane is a good thing or a bad thing? Of course it's a bad thing, but he thinks otherwise because port operators will be able to fire unionized harbormasters and thus save money by going to computerized/mechanized port operations. Without going into the economics of the situation or politics (I don't see them getting laid off if the harbor/docks in New Orleans get rebuilt), I'll post more comments on what happened.

Basically, Katrina came in under the radar, then everyone (in the media) got their panties in a bunch, predicting dire results. Then the general public started getting all upset, with the same fears. Basically, there were predictions of 10,000 people dying. That this would be a horrible tragedy for the US, etc.

And they're wrong. Of course.

Basically, the end result is that AT MOST 1,000 will die of this, mostly of their own stupidity. Some people may call for the head of the NWS or LA/MS/AL governments, but really most of the people who will die will be the fragile or the stupid. I have no sympathy for people who decide to stay in their home rather than in a shelter or evacuate. If you decide to stay, that's fine. You shouldn't be forced to move. Just don't go crying to the government or to the media when you can't get picked up. The media loves it when people tell their harrowing stories of hiding in their homes, but it's incredibly stupid. I don't have too much sympathy for them at all. It's not like anyone can't leave... there are plenty of ways to evacuate to a shelter and that won't tie up resources in a disaster.

I haven't bothered with any other station while tracking this other than the Weather Channel. Basically they have the best information and the most knowledgeable reporters. I feel really sorry for people who rely on CNN, MSNBC, Fox News or any other mainstream for their information. Hell, CNN apparently misreported a story on the Superdome in New Orleans having giant holes in the roof. I bet you won't hear about how much they screwed the pooch on that one.

I should still reserve judgement until the damage is surveyed. But the other thing that will happen is that NOONE will report on the corporate handouts that will happen in the clean up. In the name of "economic rebuilding," the owners of the skyscrapers in New Orleans and the casinos in Biloxi will probably get loads of money to repair their buildings. Of course, there's nothing going to be done about it because the program will stay in place no matter what happens.

Then there will be the people who will complain that the rebuilding will cost however many billions of dollars and the government is already wasting money on Iraq, blah, blah, blah. The fact of the matter is that because of the government handout, noone takes into account hurricanes (or floods) into their decisions on whether or not to live in a location. As a result, these hurricanes strike and everyone gets scared shitless. It's something that people should take into account and don't. And it's the people who think that get screwed as a result.

This isn't the same as people who will have their houses destroyed by tornadoes or floods that will occur hundreds of miles inland. That's something that is random and out of their control. I just have no sympathy for people of decide to live in a city that is below sea level or on the Gulf Coast where hurricane strike every year. It's not like a hurricane striking is going to be a surprise or anything.

And I don't want to hear any "this is a result of global warming" bullshit. There's no evidence one way or the other on the effects of global warming on hurricanes, though I'll actually take the global warming fearmongerers on this one. But instead of doing the whole Kyoto treaty garbage, why not just accept hurricanes and not develop right on the frickin ocean. There's plenty of development space in Pittsburgh too, you know.

Ok, enough of a rant for now. I'm going to buy gas before everyone scares that up to $2.75 down here. At least that won't affect ethanol (or it shouldn't). But the ethanol rant is for another time.