The credit crunch has gotten through to consumers

Interesting tidbit from Across the Curve:

"No interest in homes

...though consumers painted a relatively sunny picture about the outlook, they don’t seem inclined to pull the trigger on big ticket items any time soon. Home buying intentions collapsed to just 2.1% of those surveyed, the largest one-month decline since August 1990. Given the tightening in credit conditions in this space it is little wonder to us that pool of prospective buyers is getting thin, not to mention that home prices have sagged by 20% according to the latest Case Shiller numbers out earlier today. Moreover, folks are still not seeing real estate as a great place to sock their investments. According to the University of Michigan survey, only 2% of respondents think home prices are going higher.

Even more disturbing was that new car purchase intentions dropped to just 1.5% of all respondents – an all-time low. This is an ominous sign for those auto sales numbers due out tomorrow – consensus is expecting an almost unchanged print to 13.5 million units while we see sales coming in about 1 million below that mark and we would not be surprised to see sales dip below 12 million in the months ahead."

Those are low numbers, but make sense when very few have down payments ready to put down on these kinds of big purchases. One of the major automakers will have to shut down if those sales numbers pan out. There is far too much production capacity out there.

Sign of the times

"New York MTA Nixes 21,000 Bridge, Tunnel Passes After 54 Years

By Chris Dolmetsch Sept. 24 (Bloomberg) -- The free ride is over for thousands of government officials, emergency workers, police officers and firefighters who cross the seven bridges and two tunnels connecting New York City's five boroughs. Ending a practice in place since 1954, the board of New York's state Metropolitan Transportation Authority voted 7-6 today to revoke about 21,000 free passes for 90 organizations, including the mayor's office, the city's emergency management office, the district attorneys and borough presidents."

They're trying to meet a projected budget shortfall. We'll be seeing a lot more of this, I expect.

Oregon's State Climatologist on global warming

George Taylor, Oregon State Climatologist,
responds to the Willamette Week article written by Paul Koberstein
opening statement:


An article about me and my viewpoint on global warming was published on August 24, 2005 by Willamette Week. The article contained many misleading statements and errors. Below I address some of statements in the article with which I take issue.

George H. Taylor
August 26, 2005
willamette week article:

"He's also, according to his critics, one of the most dangerous men in Oregon."

taylor:
Dangerous? I’m merely expressing an opinion that runs counter to what some people think I should be saying. But I believe that the topic of the human influence on the environment should be open to debate, and I do not believe that it is "dangerous" to discuss it.

willamette week article:
"From his third-floor office in the Strand Agriculture building at Oregon State University, Taylor, 58, a state employee who runs an agency with a half-million-dollar annual budget, is often at work discrediting the well-established scientific facts about global warming."

taylor:
Not even close. State support for Oregon Climate Service is only $105,000 annually. But we share office space and personnel with the Spatial Climate Analysis Service, which gets no state money but relies on outside grants for support. Those total about $400,000 per year, for creating climate maps. Add our state support and you DO get a half-million, but the statement in the article is very misleading. I did point out to Mr. Koberstein that the state budget was much less than the combined budget, but unfortunately only the higher figure was listed.

willamette week article:
"His views have been read on the floor of the U.S. Senate and, most recently, influenced global-warming bills in Salem. In the past, he also has tried to undermine global-warming legislation in Canada."

taylor:
I was asked by Canadians to write a letter expressing my views on human effects on climate, which I did. No attempt was made to influence the legislature.
willamette week article:
"'There is a valued and much-needed role for skeptics to question the prevailing view," says Philip Mote, Taylor's counterpart in Washington state and a professor at the University of Washington. "Once in a while, the skeptics are right. But there is no debate in the scientific community over whether human-caused global warming is possible or observed. The only way one could come up with that opinion is not being familiar with the scientific literature.'"
taylor:
The issue is not “do humans affect climate?” Clearly there IS a human influence. The question is, “how much?” In my opinion, natural variations dominate the climate system, and will continue to do so. I have NEVER denied the human influence, but unlike Phil Mote I do not believe human impacts dominate the climate system.
willamette week article:
"Taylor manages the state Climate Service website (www.ocs.oregonstate.edu), which runs on a state-funded OSU server. It's peppered with criticism of global-warming theories with little rebuttal from the theories' supporters."
taylor:
There is almost no mention of global warming theories on our server. There are cases where both sides of the argument are shown: for example, a statement I made about the subject as well as links to statements made in rebuttal by two of my colleagues (both of which were referenced in the WW article; I assume the writer obtained those critical statements about me from our Web site). I have endeavored to devote the OCS Web site to Oregon weather and climate issues rather than having it be a forum for global warming theories.
willamette week article:
"Taylor's position as the leading climate expert in Oregon, a state with a national environmental reputation, has given ammo to those who are hostile to the idea that the earth is warming up. On Jan. 4 of this year, Oklahoma Republican Sen. James Inhofe, chairman of the Senate Environment and Public Works Committee, said in a Senate floor speech, "As Oregon State University climatologist George Taylor has shown, Arctic temperatures are actually slightly cooler today than they were in the 1930s. As Dr. Taylor has explained, it's all relative.""
taylor:
Journal articles show that Arctic trends are similar to US trends and Oregon trends: the warmest decade of the last 100 years was the 1930s. In Oregon and the US, the warmest year was 1934. In the Arctic, it was 1937 (references available upon request).
willamette week article:
"Accuracy about global warming matters, Mote says. By spreading misinformation about the world's most important environmental issue, Taylor can encourage people not only to have doubts about proven science, but to become complacent. "People will conclude it's still uncertain," Mote says, "so we don't have to do anything.""
taylor:
The fact that humans have a minor effect on climate does not mean “we don’t have to do anything.” There are plenty of reasons to reduce our fossil-fuel use, for example, including air pollution, foreign trade, and high fuel cost. I ride a bicycle to work every day, partly for the exercise and partly to conserve resources. Most of my most vocal critics drive cars. I wish they all rode bicycles!
willamette week article:
"Scientists have had to find a different source for their climate data. They turned to tree rings, coral, and boreholes dug deep into ice and soil for information. They added some Fortran code and produced a series of results. Since the year 1000, global temperatures were essentially flat until around 1900. In the past 30 years they have been rocketing skyward. When plotted on a graph, the result looks like a hockey stick lying on the ice, its blade pointing toward the sky."
taylor:
The “hockey stick” graph which appeared in Nature in 1998 and was quickly adopted by the IPCC has been the subject of three scientific journal articles in the last 12 months, all of which have shown that it contains significant errors. There is an interesting blog site by one of the reviewers at www.climateaudit.org.
willamette week article:
"The facts of global warming have been confirmed by hundreds of climate scientists around the world, most of whom participated in the Intergovernmental Panel on Climate Change, sponsored by the United Nations and the World Meteorological Organization. The panel issued its last report in 2001 and will update it in 2007. The IPCC says that global average surface temperatures have increased over the 20th century by about 0.6 degrees Celsius, or about 1.08 degrees Fahrenheit. Globally, it is very likely that the 1990s was the warmest decade and 1998 the warmest year. But the record shows a great deal of variability; for example, most of the warming occurred during two periods, 1910 to 1945 and 1976 to 2000."
taylor:
Fitting a straight line to a series that goes up and down cyclically is not always appropriate. Start a trend at a cool period (e.g., 1900) and end in a warm periods (the 1990s) and you get an upward trend. Start it at a warm period (say, the 1930s) and end it in a cool periods (1970s) and you get a negative trend. I distrust most linear trends. But what I do is ask myself, “are we seeing unprecedented climate conditions in recent years?” When the answer is “no,” as it is for Oregon, the US, and the Arctic, I’m a lot less worried than I would be if we were seeing things that have never happened before.
willamette week article:
"Satellite data confirm the results recorded by thermometers on the Earth's surface. They also show that the area of Earth covered by snow has decreased by about 10 percent since the late 1960s. Scientists have documented widespread retreats of glaciers and sea ice, and a serious thinning of the polar ice cap in the Arctic. The oceans are warmer since the 1950s, and sea levels have risen several inches in the past century."
taylor:
This is very common: pick a cool decade (the 1960s) and begin a trend there. Yes, snow cover probably HAS decreased since then. That’s why I prefer to look at a longer record. Granted, we have no satellite data from the 1930s, but a perusal of temperature and snow information shows that the earlier period was significantly warmer and less snowy than the cool 1960s.
willamette week article:
"The National Academy of Sciences, the American Meteorological Society, the American Geophysical Union and the American Association for the Advancement of Science all agree that humans are forcing global temperatures upward."
taylor:
I am a member of the American Meteorological Society and a Certified Consulting Meteorologist. No one asked my opinion before crafting the Society’s statement. I understand the same is true of the others. And again, the human influence is acknowledged by scientists everywhere; it’s the DEGREE of influence that is being debated.
willamette week article:
"It is hard to find a single peer-reviewed journal article that agrees with Taylor's views. A report last December in the journal Science found that of 928 major peer-reviewed academic papers on the subject of climate change, all supported the consensus view that a significant fraction of recent climate change is due to human activities."
taylor:
The report cited has been widely discredited. There are hundreds of journal articles which support my viewpoint (regarding historical trends in climate in the last 100 years) (references available upon request).
willamette week article:


"Another expert is Patrick Michaels, a research professor of environmental sciences at the University of Virginia and a visiting scientist with the Marshall Institute. In a statement posted on a State of Oregon website run by Taylor, Michaels claims he doesn't see global warming as a problem; what worries him more is a global conspiracy to shut down skeptics like himself."

"Taylor himself has supplemented his government salary with oil money. On Nov. 22, 2004, the ExxonMobil-funded website Tech Central Station (techcentralstation.com-"Where Free Markets Meet Technology") published the 2,300-word article by Taylor that Inhofe had read on the Senate floor. Taylor's article was a review of a report that had shown significant warming in the Arctic. Taylor, who has written seven articles on climate change for Tech Central Station, says he was paid $500 for the review."
taylor:
The statement by Michaels was posted in 2001, in response to a climate statement by the National Academy of Sciences, which was also posted. I wanted to include both sides of the argument, and Dr. Michaels is a renowned expert in climate science (and State Climatologist for Virginia). Why not address both sides?
willamette week article:
"Taylor's review said the authors of the Arctic study looked at only the last 35 years, ignoring data from the 1930s that show conditions were comparable to those of today. "Why not start the trend there?" he wrote. "Because there is no net warming over the last 65 years?""
"It's not clear what report Taylor was reading. In fact, the Arctic study takes into account an entire thousand years and places the Arctic in the context of the entire globe."
"In fact, the report does list most of Taylor's references-among hundreds of others."
taylor:
My review of the Arctic Climate Impact Assessment was made shortly after its release in November, 2004. I reviewed a very cursory summary, and made my comments based on that summary. A longer report was issued in June, 2005, and I have not published comments on that report, but I was pleased to see that more detail and many additional references had been added. These included most of the journal articles I had listed in my review, so perhaps my review enabled the authors to bring more balance to their report. Perhaps, in a sense, I served as an unofficial peer reviewer.
willamette week article:
'"The best explanation I can come up with is, George is very tied into the conservative bent," Coakley added. "He gets all his information from the conservative-type think tanks. George picks it up and regurgitates it. Some of the stuff is half-baked at best, but sometimes it's so bad we have to call him on it and write letters to the editor. It's just not right; it just counters all the evidence.'"
taylor:
Actually, I get most of my information from peer-reviewed journals, including Journal of Climate, Journal of Geophysical Research, and Climate Research. The articles I write (including, for example, the Arctic article) are based on journal articles and contain full bibliographies. Admittedly, I seldom give“both sides” of the argument, because the “other side” (the one that suggests that human activities exert a dominant role in the climate system) is well-represented in journals and the media. My goal is to be a voice saying “wait, maybe there’s another side to this. Take a look at THIS data and see what you think. Then let’s talk about it.” Unfortunately, this issue has become such a divisive and angry one that ad hominem attacks have replaced dialogue..
final statement:
When I write about global climate issues, I do so on my own time from home. I'm cautious about having my opinion construed as representing the State of Oregon or Oregon State University, and I try to separate my analyses of global climate from my day to day work as the State Climatologist.

Distorted oil markets

Per the linked Reuters piece...

"China's nine-month auto fuel buying frenzy ahead of the summer Olympics helped lift global oil markets to records, but beleaguered bulls beware -- it could be years before conditions force it to launch another raid. With domestic inventories filled to the brim after a huge pre-Olympics stockbuild and amid signs of slackening demand growth, a return to the spot market appears remote for now. However, that risk may grow if refiners tap the brakes on investment due to low fuel prices set by the government. Demand in the United States, which consumes about seven times more gasoline than China, has only begun to slow this year, after retail prices nearly trebled from 2004...China's retail diesel and gasoline prices, closely regulated by a government anxious to avoid stirring any rural unrest, have increased only 70 percent over the same period. By the end of this year, China will increase its refining capacity by an estimated 740,000 barrels per day (bpd), more than enough to meet oil demand forecast to grow about 430,000 bpd, allowing refiners to bring imports to a quick halt. But traders have said China will return to a net exporter of gasoline and much thinner imports of diesel this month...After their last import binge in late 2004, refiners stayed away from spot markets for nearly three years, until last autumn's domestic shortage forced Beijing to arm-twist its state refiners into buying more product overseas..."China's policy was and still is to maximize domestic diesel production and stay away from imports," said Kang Wu of FACTS Global Energy in Hawaii...before any buying happens, suppliers will need to whittle down stocks that stand at twice year-ago levels and are proving difficult to shift amid signs of slackening demand growth...China's passenger car sales fell 6.24 percent in August from a year earlier to just below half a million units -- the first drop in more than two years and a sudden reversal from years of nearly unbroken double-digit sales growth."

Conclusions:

-China's consumption is one seventh that of the US...even if growth rates of Chinese consumption were faster than the US, the increase in absolute demand would still be relatively small

-the Chinese government believes rural unrest could pose a significant threat to its existence, since it subsidizes fuel prices so heavily

-elimination by China of fuel subsidies would result in a sharp increase in end user prices, with a shift in consumption level inevitable

-Chinese growth in auto usage can decline or stagnate, and negative to flat growth is likely if a slowdown in GDP growth takes place