Everyone is opening the taps. Employment in the shale patch in the US has fallen, but production from existing wells has increased since the bust, and Russia--like the middle east--has not slowed production, either. If Iran's wells come on-line next year, it's going to mean even more oil on the world market.
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Meanwhile, Greece has basically erected the middle finger in the approximate direction of its creditors by calling their debt "illegal, illegitimate, and odious". For years I have been watching all this wondering when the ball was going to drop; well, I think it actually did, this time.
Greece can't pay what it owes--that much is certain. Is there anything else they can possibly do? What demands are being made of them by the EU? How draconian are they? The particulars are not easily digested or summarized, and I don't really have the desire to delve into it, but the obvious takeaway from what I've seen is that neither side is really interested in making any concessions to keep Greece from exiting the euro.
I still think it's inevitable; it's just a question of when, and "when" got a bit closer today.
The repercussions--it's going to have some kind of a negative effect on the world economy, but I'm not qualified to predict how big or widespread they'll be. The european economy is not doing well, and the sudden disappearance of hundreds of billions of euros' worth of credit will not make things better.
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I find myself stopping mid-sentence, backing up, erasing, and starting over a lot with this. I'm doing it because if I start down one road or another, it leads to a 50,000 word discussion of stuff I've already written about ad nauseum. I'm not Karl Denninger; I don't have that kind of energy.
Someone, though, made an observation in passing that has weighed heavily on my mind for a while. I don't remember where I saw it, worse luck, so I can't link to it, but the gist was that the fed must keep interest rates on the ground because otherwise the US will default on at least some of its debt. The enormous federal deficits are a feature of the US struggling to roll over its debt in order to avoid default. The gist of the observation was that the US is a lot closer to Greece than anyone wants to admit, and is desperately trying to cover up the fact that our credit card bills have far exceeded our ability to pay them.
Allowing the bad mortgage debt to clear, "too big to fail" banks failing, Wall Street taking one up the chute--all this would enable the economy to recover, and all recoveries include rising interest rates. If rates rise, though, suddenly the government has to pay more to borrow money...and that rapidly spins out of control.
Interest rates have declined pretty steadily over the past three decades, anyway. There have been occasional rate hikes and the decline has not been monotonic, but in general the trend has always been downward. The modified Keynesian economics practiced by the American elite can't work if interest rates are too high, and the longer you play the game the lower the rates must be, else the party comes to an end.
The party will end, though, because it can't go on forever.
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Last night Mrs. Fungus and I watched Superman Returns, and I was pleasantly surprised that the movie was much better than any of the reviews had led me to believe it would be. I mean, people who I listen to regarding movies (bloggers, I mean) panned it as an awful movie, but in fact it was actually pretty entertaining. A bit glacial in spots, but very good nonetheless.
It hearkens back to how superhero movies used to be. Lex Luthor is a bad man whose primary motivation is money, and he doesn't care who has to die for him to get it--though they added a veneer of the more modern "I want to protect Earth from superpowered aliens" meme that was applied to him more recently. They used the stirring theme music from the original movies (starring Christopher Reeve) and there were very few concessions to modern political correctness or modern-day moviemaking sensibilities. For one thing, Lois Lane was who she'd always been, not some pumped-up modern "grrl power" heroine--smart and resourceful, but no good at fighting.
Overall I thought it was an entertaining movie, worth watching, and I'm sorry that I didn't see it sooner.
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The work schedule for the next ten days doesn't look too shabby, assuming it doesn't change. Here's hoping.