4 "Imminent" Crises We've Forgotten About

"Risk is what's left over when you think you've thought of everything."
-- Carl Richards

The world is full of risks. There's no shortage of them today: Deficits are enormous, Europe is cracking, and pension funds are underfunded. These are serious risks. Some will turn into crises.

But we love to exaggerate and extrapolate. Nine times out of 10, the biggest risk isn't what's making headlines. Risk is the anonymous lurker no one's prepared for. Rarely will what's popular to worry about turn into a crisis -- at least, anytime soon. There's a half-serious rule of thumb that once Newsweek puts a warning on its cover, the risk has already passed. Things change, and there's no better way to prove it than surveying the graveyard of past crisis warnings.

Here are four from the past few years.

2008: Peak oil
For as long as we've been drilling oil, we've been worried that we're about to run out of it. In 1914, the U.S. Bureau of Mines predicted American oil reserves would be depleted in 10 years. In 1939, the official prediction was 12 more years before the wells ran dry. In 1951, the Department of Interior warned that we only had 13 years left.

Peak oil fears popped up again around 2007 and took off in 2008. "Before long $100-a-barrel oil will be regarded as 'the good old days,'" energy analyst Robert Hirsch said that year. The world wasn't prepared for a peak in oil output. "There is no good news. Nobody is really doing anything," he warned.

The fear was nearly universal. "Wake Up, America. We're Driving Toward Disaster," wrote The Washington Post. Salon, among countless others, warned of "peak oil -- that moment when supply stops growing and begins to decline, while demand continues to chug along." Alexey Miller, CEO of Gazprom, the world's biggest energy company, warned oil would hit $250 a barrel in "the foreseeable future."

Four years later, world oil output is at an all-time high, and oil prices are down 40%. U.S. oil production is the highest it's been in 14 years, rising consistently for the first time in decades. Adjusted for average hourly wage growth, gas prices today are nearly identical to where they were six years ago. In 2008, the International Energy Information Agency predicted world oil demand would be 96 million barrels per day in 2012. Now, the U.S. Energy Information Administration puts that number closer to 89 million barrels per day. Global oil supply was 3 million barrels per day higher last quarter than it was in 2008.

Hirsch warned that nobody was taking action to solve the energy problem. But they were. Fracking technology has led to a boost in production. Vehicle miles driven has dropped, and average gas mileage has jumped as consumers favor more efficient cars. People adapted -- quite well -- to what looked like an inescapable catastrophe. They usually do.

2010, 2011: Double-dip recession imminent
The last recession officially ended in the summer of 2009 (though it's an irrelevant distinction for millions still left unemployed). Ever since, there's been a race among analysts to call the next recession's arrival.

This began in earnest in mid-2010. "Economist Nouriel Roubini says the much feared double-dip recession has already arrived," one headline wrote that year. "Don't Fear Double Dip, It's Already Here," read another.

By summer 2011, people had forgotten those false alarms and were ready for another round. "Time to Say It: Double Dip May Be Happening" warned The New York Times. "10 signs the double-dip recession has begun," wrote MSNBC. "Back toward a US double-dip," said the Financial Times.

Wrong, wrong, and wrong again.

In hindsight, I think too many held the idea that any slowdown in economic growth meant a new recession was imminent. Worse, they assumed a new recession would bring calamity akin to 2008.

Neither is a good assumption. Even during expansions, growth ebbs and flows all the time. It's never a straight line up. Just as with stocks, periods of economic volatility are perfectly normal and usually don't signal anything other than noise. And in hindsight, much of what looked like a sharp slowdown last summer disappeared as economic numbers were later revised upward. Forget predicting the future; we don't even know what happened in the past.

There will be more recessions -- many more -- and their risks shouldn't be underestimated. But as a group, we tend to overestimate their frequency and effects, particularly today, with the wounds from 2008 still fresh. What's the saying? "Economists have predicted nine of the last five recessions."

2011: The death cross means a market crash awaits
Last August, the Dow (INDEX: ^DJI  ) triggered a technical indicator called the "death cross," when its 50-day moving average crossed below its 200-day moving average.

Already gripped with fear of another leg down (double-dip!), traders, journalists, and pundits turned bearish with zeal. The death cross, many claimed, was a surefire sign that stocks were poised for big losses.

"'Dead Cross' Triggered -- Look Out Below Large Caps," wrote CNBC. "Stock Market's Death Cross Looking More Deadly This Time," warned one analyst.

It went on for a good week straight. The death cross, we heard, foretold impending doom.

So how did it turn out? The death cross allegedly meant large-cap stocks were about to plunge. Yet in the year since, they've returned nearly 30%. The only thing deadly about the death cross was being duped into believing it.

2005-2009: The dollar is about to plunge
The Federal Reserve has created a staggering amount of new money, and the federal government is running massive deficits. Someday, somehow, this will very likely set off what Warren Buffett called "an onslaught of inflation."

Someday.

Until then, those who have heralded an impending collapse of the U.S. dollar and surge in inflation -- and there have been many of them for many years -- will continue to be humbled.

As best as I can tell, the collapse-of-the-dollar crowd peaked in 2009. I was once a member. As the Fed cranked up its printing machines, it seemed unthinkable that high inflation and a collapse of the dollar weren't far behind. "Hyperinflationary Depression Remains Likely As Early As 2010" was the title of one widely read 2008 report, in which the author defined hyperinflation as when "the largest pre-hyperinflation bank note ($100 bill in the United States) becomes worth more as functional toilet paper/tissue than as currency."

Nothing even close has occurred. Inflation -- that is, both the official CPI numbers and a privately calculated version compiled by MIT -- have been tame for four years. The U.S. Dollar Index, which measures the dollar's value against a basket of global currencies, traded for about 80 in 1990. By 1995 it traded for about 80. By 2005, it was 80. Today it trades for about -- you guessed it -- 80. There has been volatility all along, but the dollar's value has held up against other global currencies for decades.

What happened? Two things dispelled the doomsday predictions. Many felt the dollar would be abandoned by global investors as the U.S. tipped into recession. In reality, the opposite was true, as other global economies, particularly Europe, were in far worse shape. The dollar, for all its faults, became the mark of safety. And the vast majority of the new money printed by the Fed never made it into the pipes of the economy, as banks had no appetite to lend, and consumers worked diligently to shed debt. Doomsayers have (so far) gotten the mechanics right but the consequences wrong.

Coming up next...
Oil production will eventually peak, we will experience more recessions, and inflation is a real risk. But the more something is in the headlines, the more prone it is to distortion, rhetoric, and overreaction. Real risks are almost never what everyone's worried about. Quite the opposite, as Richards reminds us; they're what no one is worried about.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (59) | Recommend This Article (103)

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  • Report this Comment On September 26, 2012, at 2:56 PM, TMFNewCow wrote:

    Damn death cross always gets ya.

  • Report this Comment On September 26, 2012, at 3:13 PM, ryanalexanderson wrote:

    There's a sentiment that Nassim Taleb would agree with. (The article, not the death cross.)

  • Report this Comment On September 26, 2012, at 3:26 PM, Darwood11 wrote:

    The problem may simply be "TMI" and a reliance upon simple indicators in a very complex world. After all, it's difficult to separate significant events from all of the "noise" we are bombarded with.

    I love it when the likes of Alexey Miller, CEO of Gazprom, warns of $250 per barrel oil. Hmm, was that wishful thinking on Alexey's part? Ya think?

    It's like listening to the "gold bugs" waxing ecstatic about the wonders of gold.

    Has anyone ever considered that there are events that are the inverse of those "black swans" which are generally interpreted as "bad?" Unforeseen events can also have wonderful benefits.

    Of course, as we have learned, many of these "unforeseen events" are undetected by the talking heads and the politicians. Perhaps its more a consequence of who we are listening to.

  • Report this Comment On September 26, 2012, at 3:51 PM, TMFCane wrote:

    "Death cross" still ranks as one of the best-named crises, however...also good for heavy metal bands.

  • Report this Comment On September 26, 2012, at 4:06 PM, Ssmokes wrote:

    Great article Morgan. The talking heads apparently need a crisis each week to keep their jobs!

  • Report this Comment On September 26, 2012, at 4:07 PM, JaanS wrote:

    RE Peak Oil.

    I am not sure that we are out of the woods on this one. you write:

    "In 2008, the International Energy Information Agency predicted world oil demand would be 96 million barrels per day in 2012. Now, the U.S. Energy Information Administration puts that number closer to 89 million barrels per day. "

    But your statement ignores a tiny little thing - the global recession. You note that the current demand is only 89 mbpd, not 96. Most of this (I would guess) is do to falling demand from the world economy.

    So, the question then is: What will happen when we do get back to that 96 mbpd? Then where will it all come from? What will the price be?

  • Report this Comment On September 26, 2012, at 4:11 PM, JaanS wrote:

    To add - the number of miles driven that you note is down largely due to the economy, but also due to the price. The high price of gasoline itself is a drag on the economy.

    So - while I do agree with your premise overall - I think this is one that will eventually bite us.

  • Report this Comment On September 26, 2012, at 4:13 PM, TMFMorgan wrote:

    ^ Yes, the recession was a huge part of it. The world couldn't afford $150 oil in 2008, so we used less of it until prices were more reasonable. We adapted. The forecasting fail in 2008 occurred when people thought demand would keep chugging along regardless of price.

  • Report this Comment On September 26, 2012, at 5:44 PM, bizbeliever wrote:

    Reminds me that if I worry about everything then inevitably one of my worries will come true.

    Or is it more like the boy(s) who cried wolf and we become deaf to the risk?

  • Report this Comment On September 26, 2012, at 5:46 PM, MrFinance223 wrote:

    Morgan, you are correct about the oil warnings. The government and experts have never been able to get reserve estimates correct. And there were a lot of economists who were giving a high probability to the potential for a double-dip recession.

    However, the "death cross" group which I think were mostly technical analysts, and the "collapse of the US dollar" group, which were mostly gold bugs, were merely loud minorities that they never became a major influence, nor were they ever taken seriously by the majority of folks. There will always be fanatics who predict the destruction of the monetary system, the end of the word, invasion by aliens, etc. But rational folks see these crackpots for what they are. We should always consider the source when deciding what we will or will not give credibility to.

  • Report this Comment On September 26, 2012, at 5:55 PM, rsinsheimer wrote:

    "Peak Oil" is inevitable. We cannot keep drawing down a finite resource indefinitely. Whether it was 2005 (the last estimate I've seen) or 2015, or 2025, sooner or later there *will* be a peak, and the subsequent macroeconomic consequences will not be pretty. The fact that the worldwide recession has forestalled that event a bit doesn't change the end result, just the timing of it. M. King Hubbert was correct. if you don't know who Mr. Hubbert was, I suggest you do some research.

  • Report this Comment On September 26, 2012, at 6:00 PM, Gorm wrote:

    How could you forget the REALLY BIG threat, ie DEBT??

    Debt represents prior consumption paid for by reductions in future production.

    This WHOLE world is mired in debt, across ALL sectors.

    The whole global economy is driven by an ever increasing demand for more consumption. DEBT inhibits that GROWN, as evident by so many contracting economies.

    Time for that reality check!!

    Gorm

  • Report this Comment On September 26, 2012, at 6:05 PM, rbraseth wrote:

    What the author managed to skirt was any direct reference to the brutal recession of 2008/09. Strange isn't it, that you wouldn't mention and event that took up to 45 percent of people's investments savings. I'll never forget that for the rest of my life because I can't afford to. Such is the nature of financial "journalism." You gotta feed the beast 24/7 and that makes for some really goofy stories. Like this one.

  • Report this Comment On September 26, 2012, at 6:08 PM, TMFMorgan wrote:

    rbraseth,

    What would be "goofy" is using an event that only a handful of people predicted and did come true (the financial crisis) in an article about widespread predictions that didn't come true.

  • Report this Comment On September 26, 2012, at 6:12 PM, TMFMorgan wrote:

    Also,

    <<What the author managed to skirt was any direct reference to the brutal recession of 2008/09>>

    It's mentioned several times:

    "Worse, they assumed a new recession would bring calamity akin to 2008."

    "we tend to overestimate their frequency and effects, particularly today, with the wounds from 2008 still fresh"

    "The last recession officially ended in the summer of 2009 (though it's an irrelevant distinction for millions still left unemployed)"

  • Report this Comment On September 26, 2012, at 6:13 PM, xetn wrote:

    And this warning from Philadelphia Fed President Charles Plosser:

    http://www.economicpolicyjournal.com/2012/09/hot-fed-prez-sp...

  • Report this Comment On September 26, 2012, at 6:22 PM, daveandrae wrote:

    Hey Morgan-

    Don't forget about the "fiscal cliff" ( ha-ha).

  • Report this Comment On September 26, 2012, at 6:24 PM, TMFCrocoStimpy wrote:

    The general failure in these crisis scenarios comes from the always implied assumption that goes unstated: "All else remaining equal,......." But in such a complex and dynamic system, nothing remains equal when a component begins to change value significantly. Our worldwide economic/commodity/employment/etc systems are so staggeringly interconnected that we will always see self-correcting behaviour, but whether it is catastrophic in measurement (energy usage decrease due in part to slower economy/higher unemployment) or nearly unmeasurable (expansion of US dollar doesn't undermine value since all the rest of the world economies are doing worse) is largely outside the realm of even the most complex models. Though I do believe that we may someday get a significantly better handle on predicting worldwide events and impacts, currently our pundits pretty much exist at the realm of reading tea leaves to predict the rainfall during harvest season.

  • Report this Comment On September 26, 2012, at 6:38 PM, hbofbyu wrote:

    @rsinsheimer

    Everyone was freaking out about peak oil and the energy crisis of 1974. Gas lines stretched for blocks. It wasn't "pretty" as you say. Tower of Power even wrote a hit song about it: "There's only so much oil in the ground....there's no excuse for our abuse...da da da da da". I hated that song.

    That was almost 40 years ago. Peak oil won't hit us suddenly and shockingly but will be a gradual shift; as supply dimishes, alternatives will become profitable. I have no doubt about our ability to adapt whenever that happens.

    Peak oil is a catch phrase used by people and politicians to sell books and scare constituants into voting for them. When someone yaps at me about peak oil I dismiss them immediately.

    Maybe I will worry if they start writing songs about it again.

  • Report this Comment On September 26, 2012, at 6:49 PM, daveandrae wrote:

    ^

    What a load of crap

    The general failure in these crisis scenarios comes from, and are started by.....wait for it.........the MEDIA!

    One must never, ever, forget that journalism's number one job, is to keep you, the reader, coming back for more "journalism!"

    If they ever told you the simple truth (buy equities-HOLD equities), you would eventually get tired of hearing it and either turn it off, stop reading it altogether, or both.

  • Report this Comment On September 26, 2012, at 6:51 PM, TMFMorgan wrote:

    <<If they ever told you the simple truth (buy equities-HOLD equities), you would eventually get tired of hearing it and either turn it off, stop reading it altogether, or both.>>

    Many writers support buy and hold.

  • Report this Comment On September 26, 2012, at 6:54 PM, PositiveMojo wrote:

    Morgan, you may be on to something here...

    Investing is not about managing risk, it's about making good decisions.

    Harvard Business School and almost every other school worth their salt, teaches about effective decision making. The Yoda of decision making was Peter Drucker. In a nutshell here is what Drucker taught, and I've taken the liberty to apply it to investing.

    1. Determine if a decision is necessary. If you are sitting on a pile of cash, is it necessary to invest it? It's an honest question. If you think it's necessary, go to step 2.

    2. What decisions have others made and what's the result? People have invested in stocks, mutual funds, etc. Very mixed results no matter what investment vehicle. This means that there is not a clear cut solution that you can apply to your decision, which is the case you present, so proceed to step 3.

    3. Discover the cause of problem. Collect facts. Morgan, you've laid out some interesting "causes" and facts regarding volatility in the market. The "death cross" technical indicator is extremely interesting.

    Does this mean that making a good decision is linked to determining which technical indicators are pertinent today? Do technical indicators that are important today, have less meaning tomorrow? This is a significant thought.

    4. Decide on what is right. Investing is a Fools game (Motley Fool) and involves making the right decision. The right decision is easy to identify, you get a return on your investment.

    6. Pay attention to bad decisions. Determine the assumptions that were made that weren't valid and try not to make the same stupid decision again and lose money.

    Bottom line: It may be worth examining these major events and how they made specific technical indicators, more or less pertinent. It might even be a way to project a major event before it happens. Just another Foolish thought.

  • Report this Comment On September 26, 2012, at 7:06 PM, nwaluli wrote:

    Really enjoyed your article. The practice of predicting, guessing, tea leaf reading, is a very difficult and inaccurate science. At the end of the day, if all is well in our own circle, immediate family and close friends, then I think we feel pretty good about life, the economy and how it is affecting us. If our circle has family or close friends out of work, unable to get health care or homeless, then the crises is real. How much can an individual influence what the Fed will do, what congress will do or what decisions the EU will make? None what so ever. On the other hand, we can do something about our own circles and I think that is what we need to do.

  • Report this Comment On September 26, 2012, at 7:20 PM, colleran wrote:

    I was one of the peak oil people. I guess the market outsmarted me again.

  • Report this Comment On September 26, 2012, at 7:25 PM, veritasvincit wrote:

    Morgan,

    Thank you for another well-reasoned article. You are among the few to call out the doomsayers of yore.

    How often we forget that, among all the variables and different-colored swans are the nearly-constant elements of the U.S. and many other market economies...

    - People are still eating, procreating, consuming. They're busy working, creating value. Always will.

    - The rate at which people perform the activities above will vary, sometimes due to their emotions.

    - People who invest in any number of markets when those markets are relatively high risk losing considerable value. Lenders who issue credit, even when established practices and experience strongly point against it risk return of their principal and interest.

    - Societies may well be called upon to mend these mistakes, particularly when the society itself is at risk because of them.

    - People who didn't make those mistakes may well be called upon to provide the necessary resources to return to a stable economy. Those people won't like it.

    - Markets go up and down.

    - Good news rarely sells; it's only when sanity and calm are perceived as radical thoughts will media consumers consider them.

  • Report this Comment On September 26, 2012, at 7:38 PM, Jarmbru wrote:

    Global climate change may well be the only stock market crisis that matters in the long run. Time will tell.

  • Report this Comment On September 26, 2012, at 8:20 PM, rsinsheimer wrote:

    @hbofbyu

    "Everyone was freaking out about peak oil and the energy crisis of 1974. Gas lines stretched for blocks. It wasn't "pretty" as you say."

    The 1973 oil crisis had nothing to do with world peak oil -- it was the opening shot of OPEC making clear to the world that the age of cheap oil was over. Admittedly this was a well timed move on OPEC's part, as the U.S. had passed its peak oil point just a few years before, roughly 1970.

    In my opinion, the reason we should be concerned about peak oil is that the oil market is inelastic. If the demand exceeds the supply the price will skyrocket. Can you imagine a scenario where we revisit the 1974 oil lines because there just isn't enough oil available -- because we're competing with China for the dwindling supply? What would the pundits do with that?

    In 1972 oil was roughly $3.00 / barrel. After the first OPEC embargo oil was roughly $12 / barrel. If you want to look at what happens when we hit peak oil, look at 1979 when the Iranians suddenly dropped out of the oil market, leaving the demand signficantly in excess of the supply. Oil prices tripled overnight.

    Would a U.S. President go to war to ensure a continued supply of oil? Oh, wait, we already did tnat, more than once, so we know the answer.

  • Report this Comment On September 26, 2012, at 8:33 PM, candletrades wrote:

    Re: peak oil

    Just think for today!!!

    We should be good for now. Don't worry about it, let our grand kids sort it out.

    http://www.oilcrashmovie.com/

    http://www.youtube.com/watch?v=kiH0C5ectYA

  • Report this Comment On September 26, 2012, at 8:51 PM, TMFRedRam wrote:

    Hey Morgan,

    Excellent article, as usual. Quick one (kind of): how do you think the food vs population will play out over the next 10 years? I go back and forth between we-fix-it and everyone-poor-dies.

    Cheers, Andrew

  • Report this Comment On September 26, 2012, at 8:54 PM, Tortoise125 wrote:

    At the risk of sounding frivolous, I have followed with substantial success for more than 40 years the following investment axiom : NEVER BET AGAINST BIG OIL!

    Not only are they the leaders in Oil but have huge positions in Natural Gas that seems to be becoming

    the favored fuel around the globe!

  • Report this Comment On September 26, 2012, at 9:54 PM, AvianFlu wrote:

    two words:

    normalcy bias

  • Report this Comment On September 26, 2012, at 10:22 PM, AnotherHousel wrote:

    These are the bricks of the "Wall of Worry". Some are imaginary, some are not. Beginning w/the Iraq War oil prices surged from $20 to $100/bbl. Gold has gone from $300 to nearly $1800/oz. Just because the event unfolds slowly doesn't mean it isn't a crisis.

  • Report this Comment On September 26, 2012, at 11:37 PM, NickD wrote:

    America needs to get to Mars and claim it because if Mars or any other planet really has Substantial sub surface life there could be another 100 years of oil for use to play with but really oil is just a problem we need to find a more plentiful energy that wont run out

  • Report this Comment On September 26, 2012, at 11:49 PM, NightBengal wrote:

    "Forget predicting the future; we don't even know what happened in the past." -- Best line ever.

  • Report this Comment On September 27, 2012, at 12:25 AM, SuntanIronMan wrote:

    Great article as usual.

  • Report this Comment On September 27, 2012, at 12:46 AM, alvin wrote:

    great article. Although, Peak Oil is inevitable. You can't keep increasing production of a finite resource forever. Eventually it will happen.

  • Report this Comment On September 27, 2012, at 1:29 AM, joandrose wrote:

    I must confess I have a concern about computer generated "sell" instructions which are programmed to kick in automatically at certain levels as stock prices fall . A sudden drop in equity prices could possibly trigger a cascade of "sell" instructions - which could in turn infect international markets in seconds .

    Am I being paranoid ?

  • Report this Comment On September 27, 2012, at 4:25 AM, andlew wrote:

    False alarms, no matter how numerous, do not prove that there will never be a real alarm one day - they just prove poor timing. We shouldn't forget how the fable of the boy who cried wolf ended (the uncut version which I tell my children really hammers the message home). You could spend years telling a smoker that smoking causes cancer, but the fact that one has not yet contracted it does not prove the smoker is right. My point is that you could argue the case for decades that this is going to end in tears, and because it hasn't happened yet, the warner will be mocked at, but it will only take one day for the house of cards to collapse then the decades of mockery will be forgotten. This article conveys a very important message, and that is that the human being is incapable of predicting the future (even if one has done it once before). We can however look at fundamentals and carry them to their logical conclusion. The fact that we haven't arrived yet does not mean that we never will. We just need to be a little more level headed and rational, read the signs ahead, and make sure we are wearing a vest in case we lose our metaphorical shirts.

  • Report this Comment On September 27, 2012, at 8:43 AM, rru2s wrote:

    Breaking news:

    $LPH completes $110M acquisition of their 3rd oil wholesale facility, a brand new, turnkey facility with a dedicated rail spur. This adds 80% to their existing storage capacity. EPS will grow by 60%.

    $LPH auditors completed a reconciliation of 2009 to 2012 Chinese SAIC tax filings directly from state computers versus SEC filings, which proved that LPH earnings were accurately stated.

  • Report this Comment On September 27, 2012, at 8:44 AM, ziq wrote:

    Will someone please explain the "death cross"? The 50 day average by definition filters out less short-term variation than the 200 day average, so unless the DJI is constant or monotonically increasing you'd expect them to cross frequently.

  • Report this Comment On September 27, 2012, at 8:53 AM, TerryHogan wrote:

    Morgan,

    How could you ignore the Mayans? We should all be selling our equities because the world is about to end anyway.

  • Report this Comment On September 27, 2012, at 9:39 AM, Rumpleforeskin11 wrote:

    There is only one indicator that you need worry about ... and your worry will be short-lived.

    That indicator is a bright flash outside your window followed by a 1,400-degree heat wave.

    The rest of the signals won't seem to matter as much anymore.

  • Report this Comment On September 27, 2012, at 11:39 AM, Lucaskasan wrote:

    "There's a half-serious rule of thumb that once Newsweek puts a warning on its cover, the risk has already passed. " Same rule holds for financial publication. Buy the time a stock recommendation is published, the best chance to buy has already passed.

  • Report this Comment On September 27, 2012, at 1:05 PM, Howard1ii wrote:

    Morgan, good article. I really wish that whenever an article say "Bill ???? was the only one who successfully called the XXX disaster" that they would also state "of course, Bill ???? was wrong on A, B, C &/or D."

    TerryHogan - The Mayan end of world date already passed if you add in all those leap year Feb 29th's.

  • Report this Comment On September 27, 2012, at 1:10 PM, RocketmanL5 wrote:

    This is precisely the kind of article that I can truly appreciate. I love reading articles from 6 - 12 months ago, and seeing just how far off the mark they ALL are. There is a divergence btwn projections and reality, and the farther you go back, the greater it gets.

  • Report this Comment On September 27, 2012, at 4:03 PM, Marmadukemark wrote:

    It's true that we keep producing more oil; but, of what quality and at what cost. Well, the quality has gone down and the costs have gone up. I've read that it now takes the equivalent of 1 barrel of oil to produce 3 barrels - an all time high.

    Moreover, the demand for resources (food, oil, etc.) are growing exponentially, while the production of these resources are not. Will we be able to feed the exponentially growing population with resources that are becoming increasingly limited (e.g. farmland, inputs, distribution, etc.)?

    I love your optimism, but we do not exist in a vacuum. Take a long sniff and smell the corn.

  • Report this Comment On September 27, 2012, at 6:25 PM, TomBooker wrote:

    I refuse to hit the eject button until the Hindenburg Omen is firmly in place. It is sure to arrive any moment now.

    At the Phila Meet-up on Invest Better Day, I expected to meet 20 Fools.

    Not so. The majority of the people I met were civilians.

    Usually I scare people. But these folks were scaring me. Almost all of them believed or somebody had told them,.. the Market is going to crash very soon.

    They accepted this as a fact.

    I tried to explain that the future often shows up looking different than you thought it would. And in our odd contrarian way, crashes are to be expected and constitute some degree of opportunity.

    Blank stares.

    Geez. I knew the Stock Market had become somewhat of a Retailer pariah, but i way underestimated the depth of conviction.

  • Report this Comment On September 28, 2012, at 6:37 AM, devoish wrote:

    "In 1939, the official prediction was 12 more years before the wells ran dry. In 1951, the Department of Interior warned that we only had 13 years left."

    In 1970 US crude oil production did peak at 10,000,000 barrels per day. Today production is slightly more than half of that.

    How was that a wrong prediction?

    "Some economists expect higher oil prices and improved technologies to continue

    to provide ever-increasing oil production for the foreseeable future. Most

    geologists disagree because they do not believe that there are many huge new

    oil reservoirs left to be found. Accordingly, geologists and other observers

    believe that supply will eventually fall short of growing world demand – and result

    in the peaking of world conventional oil production." US Dept of Energy publication 2005.

    http://www.netl.doe.gov/publications/others/pdf/oil_peaking_...

    Peak world oil production is probably already behind us. Due to the lower cost of solar panels and increased cost of oil extraction It is already cheaper to the end user in many parts of the USA to use solar power. For those with money to invest the savings are certainly a better return than an investment into XOM at its historical returns.

    In the developing world it is also certainly much less costly to install small scale solar/wind than to build out oil infrastructure only to face ever increasing input costs for energy.

    It is ending for oil as energy and only an extensive marketing campaign against renewables and Government support for oil is keeping it from failing faster.

    In terms of peak oil I do not think that economists over rule geologists.

    In terms of economics I do think that macro follows micro.

    The melting of the arctic ice caps may delay the inevitable, but that's all it will do and it will not hold down the price enough to prevent renewable energy from dominating.

    The choices are simple at this point.

    One is to distribute the wealth of solar energy to a majority through Government taxation and redistribution promoting rooftop solar without the continued exchange of money and shrink the economy. It would have been cheaper than Iraq.

    The second is to concentrate the wealth of solar energy into a very few hands through the financial industry using loans and indebtedness to promote small scale solar and put any cost savings into financial industry growth and investors through interest charged.

    The third and fourth is to use Government or finance to build and promote large scale solar "farms" creating jobs and ultimately higher energy costs to the end consumer and grow the economy. But that choice for renewables is less economically competitive against other forms of electric generation except nuclear.

    Best wishes,

    Steven

  • Report this Comment On September 28, 2012, at 7:19 AM, TMFMorgan wrote:

    Steven,

    The warning wasn't about a peak in output. It was that reserves would be exhausted entirely.

    -Morgan

  • Report this Comment On September 28, 2012, at 8:28 AM, JohnR103 wrote:

    The "2011: The death cross" section linked to an article from mid-2010 (Is There Life After the DJIA Death Cross?) that actually debunked the idea it was a surefire sign that stocks were poised for big losses. Page two says - "Long story short: You simply can't predict where the market is headed by merit of a single 'death cross.' It's just as likely to signal an oversold bull market as it is the beginning of a new bear market."

  • Report this Comment On September 28, 2012, at 10:58 AM, JACKESS wrote:

    With hundreds of biofuel projects underway I expect the cost of these will cross below the cost of fossil fuels before we actually run out of oil and coal.

  • Report this Comment On September 28, 2012, at 11:52 AM, mikepriz wrote:

    Printing money like there is no tomorrow has not had bad consequences because the Euro is in trouble, and there is no other safe currency. Therefore we should immediately print 16 trillion dollars and pay off our debt. The problem with economics is that nothing happens quickly. Raise taxes and immediately the government has more money to spend. But as investment slows, in the end tax receipts go down. Japan exported but did not allow imports. Books were written about the Japanese genius. Look at Japan now. How many decades have they lost? Trust me, eventually you will pay!

  • Report this Comment On September 28, 2012, at 12:04 PM, whyaduck1128 wrote:

    Macroeconomics: The world will end someday.

    Microeconomics: I will die someday.

    These are the only certainties I know of. Beyond that, it's all guesswork. I pay little attention to guesswork.

  • Report this Comment On September 28, 2012, at 12:59 PM, TheDadDan wrote:

    "Ditch These ETFs Now

    The rumors have been swirling for months: ETFs are dangerous. Now one well-known Motley Fool analyst is going on record to say that your ETF holdings might just sink your portfolio"

    Is that part of the article???

  • Report this Comment On September 28, 2012, at 1:04 PM, TMFMorgan wrote:

    ^ No. It is separate from the article.

  • Report this Comment On September 28, 2012, at 1:13 PM, playtothebeat wrote:

    Not surprising - we all tend to overreact and put far more weight on current events rather than historical trends (recency bias). This is why during the dot.com boom and the housing boom everyone thought stocks and housing prices will continue to go up, and why in early 2009 everyone thought stocks are sure to keep going down (Dow 5000, anyone?).

  • Report this Comment On September 28, 2012, at 2:43 PM, spmccown wrote:

    My favoite crisis that never was was Y2K. I work in banking and we were addressing the potential computer problems starting in about 1996. By 1998, the regulators were on board looking over everyones shoulder to make sure all was well. In 1999 the media got all in a lather about the pending doom and started scaring the public at large. MSNBC was running a promotion as late as 10:30 CST 12/31/99 saying they say the are prepared, but what if they are wrong? 45 minutes later they were saying about how overblown this whole thing was and how much money did the government and business waste on this event! It would have been an event if people hadn't been working on it in the mid to late 90s but it was the poster child for media hyping something to sell ads at someone else's expense.

  • Report this Comment On September 28, 2012, at 3:00 PM, masterN17 wrote:

    I am so glad the first comment is what it is. Nicely done.

  • Report this Comment On September 28, 2012, at 8:33 PM, minnyclark wrote:

    We are living in an economical "bubble", several actually. Printing trillions of dollars will turn out well, only if the underlying economy is in sound health, as it will absorb the "paper", or allowed it to be pulled out, before inflation has a chance to rise. Our economy is being held up by money printing: the stock market would have plummeted during Q1, without the printing. With a market swoon, the rest of a shaky housing market would have followed, and then the dollar, and we would be sitting in the international crisis, which will be much worse now, when it comes, because the trillions of printed dollars will sit there, and cause double digit inflation. Since the top 20% of earners account for 40% of discretionary spending, (along with a huge chunk of stock investments) the printing has kept them content to spend and invest...but it cannot last, there is no growing economy, no job growth, no housing appreciation- only growing printing press hours. It must come down, it will come down, and it kills me to say it. My country can never repay 15 trillion in debt, (no one disputes this) largely bought by China, to keep us from default; my dollar will be set aside as the world currency; and we will no longer be the drivng force and power in the world economy. People: invest in metals and energy, get out of stocks, bonds, and "paper", they are going up in smoke within 2 years. Read, read the people who don't have to sing a nice song, read the people who predicted 2006, 2008, and who realize 2010 isn't over, we're still living it, we just printed a delay, a big delay, which will be toxic to our country, big time. Wake up!

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