So Much For Chinese Demand

"The International Energy Agency cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, it said in its Medium- Term Oil Market Report today. Consumption will average 86.76 million barrels a day in 2012, the first year it will rise above 2008’s level of 85.76 million barrels a day, according to the Paris-based agency."

Well so much for demand for Energy from China. This demand growth has always been hyped by Energy bulls, but as I and many others have stated previously, what really matters is demand growth from the the U.S. and other industrialized nations.

Here is how the math works:

Oil demand in 2009 for the OECD countries is 45.2 million barrels per day, down 2.3 million barrels per day from 2008.

China oil demand is 7.9 million barrels per day. Let's assume that it grows at 5% a year, or about 400,000 barrels per day.

As you can see, the fall in demand from the OECD easily wipes out demand growth from China by a factor of at least five.

Two More Oil Bears

James Mulva, the CEO of Conoco Phillips said that the doubling in the price of oil off of its bottom to $73 a barrel was "a little bit ahead of the actual supply and demand situation and inventory levels."

Nouriel Roubini, the economist, said that the rally in oil prices was "too high too soon." Here's a short video of Roubini covering his full views on the current economy.

When General Motors Ruled The World - Part III

General Motors was formed in 1908 by William Durant, when he incorporated the Buick Motor Company. Later that year, Oldsmobile becomes the second company to join General Motors. In 1909, General Motors purchased a 50% interest in the Oakland Motor Car Company, which later became known as Pontiac. In 1909, General Motors bought Cadillac for $5.5 million. This is a photographic tribute to this iconic American institution.

In 1936 and 1937 the United Auto Workers (UAW)attempted to organize the labor force at General Motors. This strike later became known as the "Flint sit down strike," where workers occupied the large General Motors plant in Flint, Michigan.

The strike spread to other plants and in February 1937, General Motors capitulated and recognized the UAW as the exclusive bargaining representative of workers in the union.

The first three pictures below are of John L. Lewis, and other labor leaders discussing the strike in January 1937 in Washington, DC.

Did the union victory in 1937 plant the seeds of the eventual destruction of General Motors? These men had no way of knowing, obviously, and were just fighting for basic rights that we take for granted. It certainly is not fair to blame the union for all of the ills of General Motors, as management made its share of bad decisions.

The final picture is the management of General Motors, including Alfred Sloan, discussing the strike with the Governor of Michigan and the U.S. Secretary of Labor. The management of General Motors refused to even sit in the same room with the Union leaders and all negotiations had to be done through intermediaries.