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post #1 of 10 (permalink) Old 12-07-2010, 10:10 PM Thread Starter
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Diesel Fuel Economic Indicator WSJ

Diesel-Fuel Gauge Shows Economic Hurdles


Even as the U.S. economy has emerged from one soft patch, another potentially looms.


An index that uses diesel-fuel consumption as a proxy for economic activity has a good track record of signaling economic turning points.


Take the little-known Ceridian-UCLA Pulse of Commerce Index, out Tuesday, which uses diesel-fuel consumption as a proxy for economic activity. The seasonally adjusted index will show a small uptick in November following three straight monthly declines. Unfortunately, the 0.4% gain isn't enough to reverse the prior month's decline—or to break its downward momentum.

The three-month rolling average of the index has declined for three of the past four months, breaking a run of 13 prior gains dating back to the recession's official end in June 2009. That points to annualized gross-domestic-product growth of "2% or under" in the current fourth quarter, says PCI chief economist and UCLA professor Ed Leamer.

That is a pretty contrarian view. Many economists have been raising their U.S. growth forecasts following a raft of better-than-expected economic reports, plus the Federal Reserve's ultra-loose monetary policy. Goldman Sachs now expects GDP will grow at a 2.7% pace in the fourth quarter and 3.6% next year. Similarly, Barclays Capital strategists recommend investors move from a defensive to a more aggressive stock-based portfolio heading into 2011.

But investors shouldn't tune out the creaking wheels of commerce. The PCI, over its 11-year history, has a decent record of nailing economic turning points. It peaked in January 2008, just one month after the recession officially began, then hit bottom the same month the recession ended last June. Most recently, it has been trending down since topping out back in May.



Mr. Leamer chalks it up to the double whammy of a fading inventory boom plus weakness in construction and manufacturing. Recent data from the Institute for Supply Management support this view: the manufacturing production index fell nearly eight points last month, while the inventory index hit a 25-year high. Last Friday's jobs report, meanwhile, showed both industries shed workers in November as the U.S. unemployment rate rose to 9.8%.

That doesn't mean a double-dip recession is around the corner. It does cast doubt on the potential for lowering the unemployment rate, though—and suggests the U.S. economy isn't carrying quite as much momentum into next year as Wall Street seems to expect.
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post #2 of 10 (permalink) Old 12-07-2010, 10:11 PM Thread Starter
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Re: Diesel Fuel Economic Indicator WSJ

I found this interesting..
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post #3 of 10 (permalink) Old 12-07-2010, 10:40 PM
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Re: Diesel Fuel Economic Indicator WSJ

don't really know much about how these things work, but when the gov shut down offshore drilling all those rigs stopped needing diesel, and trust me, those things use a lot of fuel.
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post #4 of 10 (permalink) Old 12-07-2010, 10:49 PM
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Re: Diesel Fuel Economic Indicator WSJ

You can thank me later... Generator takes about 200 gallons twice a week...

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post #5 of 10 (permalink) Old 12-08-2010, 08:32 PM
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Re: Diesel Fuel Economic Indicator WSJ

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don't really know much about how these things work, but when the gov shut down offshore drilling all those rigs stopped needing diesel, and trust me, those things use a lot of fuel.
No they didn't. They are drilling elsewhere.

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post #6 of 10 (permalink) Old 12-08-2010, 09:32 PM
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Re: Diesel Fuel Economic Indicator WSJ

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No they didn't. They are drilling elsewhere.
true but they're buying their diesel from elswhere.
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post #7 of 10 (permalink) Old 12-09-2010, 11:33 PM
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Re: Diesel Fuel Economic Indicator WSJ

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You can thank me later... Generator takes about 200 gallons twice a week...
You better pay attention or speak up. The epa wants to minimize the use of diesel generators/diesel pumps to 100 hrs per year. I don't think this will pass, but this is what they are proposing. they want everything to go electric (pumps, generators, whatever falls into their description). I just got word of this, this week.
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post #8 of 10 (permalink) Old 12-10-2010, 03:17 PM Thread Starter
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Re: Diesel Fuel Economic Indicator WSJ

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You better pay attention or speak up. The epa wants to minimize the use of diesel generators/diesel pumps to 100 hrs per year. I don't think this will pass, but this is what they are proposing. they want everything to go electric (pumps, generators, whatever falls into their description). I just got word of this, this week.
I heard the same thing
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post #9 of 10 (permalink) Old 12-10-2010, 03:26 PM
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Re: Diesel Fuel Economic Indicator WSJ

OK, that makes sense, I want an electric generator. That way when the power goes out, all I need to do is plug my generator in.......hmmmm, wait a sec.

And electric/diesel pumps. OK, run a power line all the way out to the drilling platform. And even if you do use electric instead of diesel, most of our electricity comes from burning coal. Pretty much just oil in it's solid state.




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post #10 of 10 (permalink) Old 12-10-2010, 03:35 PM Thread Starter
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Re: Diesel Fuel Economic Indicator WSJ

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Originally Posted by Arisley View Post
OK, that makes sense, I want an electric generator. That way when the power goes out, all I need to do is plug my generator in.......hmmmm, wait a sec.

And electric/diesel pumps. OK, run a power line all the way out to the drilling platform. And even if you do use electric instead of diesel, most of our electricity comes from burning coal. Pretty much just oil in it's solid state.
Right on dude, the BS the government comes up with is nuts. They want to control every aspect of our lives. The United States over regulates. I mean, look at China, they have 1.5 billion people, they don't give a chit about pollution control, so what good are we really doing? Ill tell you, all we do is shoot ourselves in the foot because of the dam do gooders.
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