Globalisation debt & banking
Grandpa Aerotart
Did you deliberately ignore the 'at late 90s usage rates'?
In the book he took then proven reserves and divided it by total oil consumed by mankind up to that point and the answer was in 1000s of years not 10s.
His point, and mine, is only that we're not running out of oil on any time frame that need concern humanity now. We have only been using oil as we currently do for about 130 years. Look at the changes in technology we have seen since the late 1800s - does anyone seriously think we will still be using oil the way we do now in 100 years time....let alone 1000yrs?
I don't actually care what mankind will be worrying about 50 generations from now. Nor do any of you if you're honest.
In the book he took then proven reserves and divided it by total oil consumed by mankind up to that point and the answer was in 1000s of years not 10s.
His point, and mine, is only that we're not running out of oil on any time frame that need concern humanity now. We have only been using oil as we currently do for about 130 years. Look at the changes in technology we have seen since the late 1800s - does anyone seriously think we will still be using oil the way we do now in 100 years time....let alone 1000yrs?
I don't actually care what mankind will be worrying about 50 generations from now. Nor do any of you if you're honest.
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And if we read from a different book, I can then get facts that agree much more with my idea of what is credible.
From the link posted above
Getting a bit of thread drift here,but, at late 90's consumption figures, approx 67 million barrels per day for 365 days 24,455,000,000 barrels multiply that by even 1,000 years and that is an awful lot of oil somewhere that are supposedly known/proven? reserves??
From the link posted above
Now, it's not as if high prices haven't sent people looking for more oil and working on more substitutes. The problem is that all of this activity is facing a considerable headwind. It's called depletion. And, as they say in the oil patch, depletion never sleeps. It's going on in every operating well in every country around the clock, 365 days a year. Estimates suggest that the decline in current production capacity might be around 4 percent per year. That means that 4 percent of the current production capacity for oil must be replaced each year just to break even. And, of course, to grow supplies, new production capacity must exceed this amount. But it hasn't, and oil substitutes haven't really grown by any significant amount in the last six years either.
The media loves to announce new seemingly large discoveries of oil as if they are the solution to what is really an unfolding liquid fuels crisis. They point to the Tupi field off Brazil which is purported to have 8 billion barrels of oil in it. And, they point to discoveries in the deepwater Gulf of Mexico thought to contain between 3 and 15 billion barrels. And, they point to the 4 billion barrels in the Bakken Shale in North Dakota. It all sounds like a lot. When I ask audiences how long a billion barrels of oil will last the world at current rates of consumption, I often get replies that range anywhere from three months to 5 years. The correct answer is 12 days. Just multiply these multi-billion-barrel discoveries by 12, and you'll realize right away that they are not going to overcome the constraints we are experiencing in oil supplies
The media loves to announce new seemingly large discoveries of oil as if they are the solution to what is really an unfolding liquid fuels crisis. They point to the Tupi field off Brazil which is purported to have 8 billion barrels of oil in it. And, they point to discoveries in the deepwater Gulf of Mexico thought to contain between 3 and 15 billion barrels. And, they point to the 4 billion barrels in the Bakken Shale in North Dakota. It all sounds like a lot. When I ask audiences how long a billion barrels of oil will last the world at current rates of consumption, I often get replies that range anywhere from three months to 5 years. The correct answer is 12 days. Just multiply these multi-billion-barrel discoveries by 12, and you'll realize right away that they are not going to overcome the constraints we are experiencing in oil supplies
Last edited by prospector; 14th Aug 2012 at 03:07.
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TWE and Oicur. Just finished "Currency Wars" and I can highly recommend it as well. Thankyou. Very well written and easy to digest. It ties together a lot of the individual ideas I've had floating around and demonstrates clearly and concisely where we've been, the faults made and the paths forward. A recommended read 
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Did someone mention Lomborg?
If you want the facts look up IEA World Energy Outlook 2011.
We may not run out of oil in 2035 but it will be a lot more expensive!
If you want the facts look up IEA World Energy Outlook 2011.
We may not run out of oil in 2035 but it will be a lot more expensive!
Getting back to the immediate crisis just for a minute :
From the UK Daily Telegraph:
Just to explain a little further, Maersk's problems in our area [and on the China-USA route] are due to them facing undercutting from Chinese and Taiwanese shipping lines with a lower cost base. The Chinese shipping companies are doing exactly what China Southern is doing to other airlines.
From the UK Daily Telegraph:
World shipping crisis threatens German dominance as Greeks win long game
Germany’s shipping industry faces a wave of bankruptcies over coming months as funding dries up and deepening economic woes across the world cause a sharp contraction in container trade.
Over 100 German ship funds have already shut down as the long-simmering crisis in global container shipping finally comes to a head. A further 800 funds are threatened with insolvency, according to consultants TPW in Hamburg.
They are not alone. Britain’s oldest shipowner, Stephenson Clark, dating back to 1730, went into liquidation last week, closing the final chapter of Britain’s coal trade and the industrial revolution.
It cited “incredibly depressed” vessel rates. The firm over-invested in the boom four years ago, betting too much on the China syndrome.
Germany is the superpower of container shipping, controlling almost 40pc of the world market. The Germans also misread the cycle and have been struggling to cope ever since with a legacy of debt and a glut of ships. Now everything is going wrong at once.
Container volumes arriving at European ports plunged in June, dashing expectations of a summer rebound. Imports fell 7.5pc from North America and 9pc from Asia. Flows into the Mediterranean region crashed by 16pc, reflecting the violence of the recession in Greece, Italy, Spain, and Portugal.
Buckling trade is the coup de grace for countless shippers still clinging on by their finger tips. “The market is barely paying above operating cost. If you are loaded with debt, you are in trouble,” said Martin Smith from ship operators Norddeutsche Vermögen in Hamburg.
It is much same story in the Pacific region where Danish shipper Maersk said that it is losing over $200 for every container on the Qingdao-Melbourne route. But what the Germans face is the double-whammy of a funding squeeze.
“If you don’t have a line of credit already, nobody is going to give you one. We’re suffering a liquidity crisis, and its almost impossible for single vessel owners,” said Mr Smith.
Commerzbank – the world’s second-biggest provider of ship finance, and reluctant owner of a flotilla of foreclosed ships – said it is shutting down its €20bn (£15.7bn) ship funding operations entirely to “minimise risk and capital lock-up” under tougher EU banking rules.
“The essential reasons are the high capital and rising liquidity requirements under Basel III,” it said. Commerzbank’s move is the latest evidence that forcing banks to raise capital ratios too fast – and too soon – can choke lending to the real economy. Most of the 20 top banks for the shipping industry have stopped all funding.
“Shipping is the biggest casualty of the new regulations. All the banks are reducing their portfolios, using any breach of covenant to get out of contracts. The second-hand ship market has broken down,” said Mr Smith. Both bulk ships and tankers are trading at lower levels today than during the worst moments of the 2008-09 crisis.
Clarkson’s ClarkSea Index for maritime freight rates has halved since mid-2010, and fallen by 80pc since 2008. This includes the wildly volatile Baltic Dry Index for bulk freight, which has crashed by 90pc to post-Lehman depths. Container rates have held up better but small “feeder” ships are mostly losing money. High oil costs are eating up margins.
“It’s familiar territory,” said Clarkson’s Shipping Intelligence Weekly. “As pressure builds, owners are forced to lay up ships and, with no cash flow, they can’t pay their bankers. As their ships are forced on to the market, prices spiral down. Well-heeled companies snap up the good ones and the rest go for scrap.”
The odd twist is that Greek shippers are the ones quietly snapping up bargains from distressed German companies “The Greeks are sitting on a pile of cash. They are in their own special cocoon completely removed from Greece’s political troubles,” said Dimitris Morochartzis from Lloyd’s List Intelligence.
“They played their cards really well during the boom, selling ships for a profit at the top of cycle. They are now buying them back for a fraction of the price,” he said.
The Greek group Costamare has spent $1.2bn (£764m) since early 2011 expanding its fleet. Last month it bought the Stadt Lubeck from an insolvent German group for $11.3m.
The striking feature of the deal was that Hypovereinsbank provided 100pc financing, a privilege denied to German shippers. “They like their Greek customers more than us,” said one German shipper, quoted by Lloyd’s List.
Giorgos Xiradakis from consultants XRTC said Greek firms are teaming up with Chinese banks. Chinese premier Wen Jiabao pledged $5bn in loans to the Greek shipping industry two years ago, part of a twin-headed plan to gain a stronger foothold in the EU market and to provide vendor financing for the Yangtze shipbuilding industry – currently in dire straits.
German shipping experts say that two-thirds of the country’s marine fleet is in financial distress. If the crisis drags on much longer, the Greeks may leapfrog ahead to become world leaders in container shipping. The irony of prudent Greeks cleaning up after a reckless debt spree by the Germans is lost on nobody.
Germany’s shipping industry faces a wave of bankruptcies over coming months as funding dries up and deepening economic woes across the world cause a sharp contraction in container trade.
Over 100 German ship funds have already shut down as the long-simmering crisis in global container shipping finally comes to a head. A further 800 funds are threatened with insolvency, according to consultants TPW in Hamburg.
They are not alone. Britain’s oldest shipowner, Stephenson Clark, dating back to 1730, went into liquidation last week, closing the final chapter of Britain’s coal trade and the industrial revolution.
It cited “incredibly depressed” vessel rates. The firm over-invested in the boom four years ago, betting too much on the China syndrome.
Germany is the superpower of container shipping, controlling almost 40pc of the world market. The Germans also misread the cycle and have been struggling to cope ever since with a legacy of debt and a glut of ships. Now everything is going wrong at once.
Container volumes arriving at European ports plunged in June, dashing expectations of a summer rebound. Imports fell 7.5pc from North America and 9pc from Asia. Flows into the Mediterranean region crashed by 16pc, reflecting the violence of the recession in Greece, Italy, Spain, and Portugal.
Buckling trade is the coup de grace for countless shippers still clinging on by their finger tips. “The market is barely paying above operating cost. If you are loaded with debt, you are in trouble,” said Martin Smith from ship operators Norddeutsche Vermögen in Hamburg.
It is much same story in the Pacific region where Danish shipper Maersk said that it is losing over $200 for every container on the Qingdao-Melbourne route. But what the Germans face is the double-whammy of a funding squeeze.
“If you don’t have a line of credit already, nobody is going to give you one. We’re suffering a liquidity crisis, and its almost impossible for single vessel owners,” said Mr Smith.
Commerzbank – the world’s second-biggest provider of ship finance, and reluctant owner of a flotilla of foreclosed ships – said it is shutting down its €20bn (£15.7bn) ship funding operations entirely to “minimise risk and capital lock-up” under tougher EU banking rules.
“The essential reasons are the high capital and rising liquidity requirements under Basel III,” it said. Commerzbank’s move is the latest evidence that forcing banks to raise capital ratios too fast – and too soon – can choke lending to the real economy. Most of the 20 top banks for the shipping industry have stopped all funding.
“Shipping is the biggest casualty of the new regulations. All the banks are reducing their portfolios, using any breach of covenant to get out of contracts. The second-hand ship market has broken down,” said Mr Smith. Both bulk ships and tankers are trading at lower levels today than during the worst moments of the 2008-09 crisis.
Clarkson’s ClarkSea Index for maritime freight rates has halved since mid-2010, and fallen by 80pc since 2008. This includes the wildly volatile Baltic Dry Index for bulk freight, which has crashed by 90pc to post-Lehman depths. Container rates have held up better but small “feeder” ships are mostly losing money. High oil costs are eating up margins.
“It’s familiar territory,” said Clarkson’s Shipping Intelligence Weekly. “As pressure builds, owners are forced to lay up ships and, with no cash flow, they can’t pay their bankers. As their ships are forced on to the market, prices spiral down. Well-heeled companies snap up the good ones and the rest go for scrap.”
The odd twist is that Greek shippers are the ones quietly snapping up bargains from distressed German companies “The Greeks are sitting on a pile of cash. They are in their own special cocoon completely removed from Greece’s political troubles,” said Dimitris Morochartzis from Lloyd’s List Intelligence.
“They played their cards really well during the boom, selling ships for a profit at the top of cycle. They are now buying them back for a fraction of the price,” he said.
The Greek group Costamare has spent $1.2bn (£764m) since early 2011 expanding its fleet. Last month it bought the Stadt Lubeck from an insolvent German group for $11.3m.
The striking feature of the deal was that Hypovereinsbank provided 100pc financing, a privilege denied to German shippers. “They like their Greek customers more than us,” said one German shipper, quoted by Lloyd’s List.
Giorgos Xiradakis from consultants XRTC said Greek firms are teaming up with Chinese banks. Chinese premier Wen Jiabao pledged $5bn in loans to the Greek shipping industry two years ago, part of a twin-headed plan to gain a stronger foothold in the EU market and to provide vendor financing for the Yangtze shipbuilding industry – currently in dire straits.
German shipping experts say that two-thirds of the country’s marine fleet is in financial distress. If the crisis drags on much longer, the Greeks may leapfrog ahead to become world leaders in container shipping. The irony of prudent Greeks cleaning up after a reckless debt spree by the Germans is lost on nobody.
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Cheap transport is considered CRUCIAL for the wider economy to flourish.
There is no big money in shipping or airlines anymore.
It will be Cost plus a small percentage and anyone who gets greedy will be undercut.
The only losers are people who work in such industries - unfortunately
There is no big money in shipping or airlines anymore.
It will be Cost plus a small percentage and anyone who gets greedy will be undercut.
The only losers are people who work in such industries - unfortunately
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Tick tock goes the Wallstreet clock!
Sneaky sneaky.
Biggest banks in US ordered to draw up crisis
plans
04:46
AM Aug 11, 2012
WASHINGTON - United States regulators have directed five of the
country's biggest banks to develop plans for staving off collapse if they faced
serious problems, emphasising that the lenders could not count on government
help.
The two-year-old programme, which has been largely kept secret, is
in addition to the "living wills" the banks crafted to help regulators dismantle
them if they fail. It shows how hard regulators are working to ensure that
banks have plans for worst-case scenarios and can act rationally in times of
distress.
According to documents Reuters obtained under the Freedom of
Information Act, the Federal Reserve and the US Office of the Comptroller of the
Currency directed Bank of America, Goldman Sachs, Citigroup, Morgan Stanley and
JPMorgan Chase to come up with these "recovery plans" in May 2010.
They told the banks to consider drastic efforts to prevent failure in times of
distress, including selling off businesses, finding other funding sources if
regular borrowing markets shut them out and reducing risk. The plans must be
feasible to execute within three to six months, and banks were to "make no
assumption of extraordinary support from the public sector".
Spokespeople for the five banks and the Federal Reserve declined to comment
yesterday.
Reuters
plans
04:46
AM Aug 11, 2012
WASHINGTON - United States regulators have directed five of the
country's biggest banks to develop plans for staving off collapse if they faced
serious problems, emphasising that the lenders could not count on government
help.
The two-year-old programme, which has been largely kept secret, is
in addition to the "living wills" the banks crafted to help regulators dismantle
them if they fail. It shows how hard regulators are working to ensure that
banks have plans for worst-case scenarios and can act rationally in times of
distress.
According to documents Reuters obtained under the Freedom of
Information Act, the Federal Reserve and the US Office of the Comptroller of the
Currency directed Bank of America, Goldman Sachs, Citigroup, Morgan Stanley and
JPMorgan Chase to come up with these "recovery plans" in May 2010.
They told the banks to consider drastic efforts to prevent failure in times of
distress, including selling off businesses, finding other funding sources if
regular borrowing markets shut them out and reducing risk. The plans must be
feasible to execute within three to six months, and banks were to "make no
assumption of extraordinary support from the public sector".
Spokespeople for the five banks and the Federal Reserve declined to comment
yesterday.
Reuters
Last edited by gobbledock; 16th Aug 2012 at 06:26.
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This is a beat up.
The US financial system is recovering well.
With Interest rates so low, the market will be highly attractive for the next few years.
For everyone saying it will go down, there is another saying it will go up.
The US will be fine - Its europe that is facing some problems.
The US financial system is recovering well.
With Interest rates so low, the market will be highly attractive for the next few years.
For everyone saying it will go down, there is another saying it will go up.
The US will be fine - Its europe that is facing some problems.
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An excellent read:
. Download the book in .pdf format for computer / iPad: (cut and paste link into address bar) http://www.mediafire.com/file/e5cmfsvp4mr7q00/Century_of_War.pdf
============================================================ ==================================================
Really? take a look at the first chart below of US debt - and its growth since the 60's. Is the growth in debt sustainable into the future? Do you even take debt into account? Most "conventional" ie Keynsian economists don't even consider debt in their macro models as "we owe it to ourselves" and therefore drops out of both sides of the equation. If debt can continue to increase for the foreseeable future, things will be fine.
Note also the increase in FIN (Financial sector) debt since the late 80's - this is what has propelled the stock market with debt based speculation.
You may also want to do some research on the Shadow Banking system and its deleveraging since 08.
Deleveraging Needed In Next 4 Years: $28 Trillion
============================================================ ==================================================
Originally Posted by Crystalballwannabe
The US will be fine - Its europe that is facing some problems.
Note also the increase in FIN (Financial sector) debt since the late 80's - this is what has propelled the stock market with debt based speculation.
You may also want to do some research on the Shadow Banking system and its deleveraging since 08.
Deleveraging Needed In Next 4 Years: $28 Trillion
Over the past several years, there has been much speculation and numerous reports that America is deleveraging. It isn't. In fact, consolidated across the 5 different kinds of American debt, which takes into account not only federal, but also financial, municipal, household and non-financial, total debt as a percentage of GDP has not budged over the past 4 years and is flat at 350% of GDP. Which simply means that all of the household debt that has supposedly vaporized (at least until the next major Flow of Funds revision), all of which has taken place purely from discharges on uncollectable mortgage and credit card debt, has been replaced by federal debt, while financial debt has merely soared to take the place of the collapsing shadow debt which is imploding as the confidence in a Fed-free financial system erodes to zero. Which of course, is the worst possible outcome: instead of funding private, individual entrepreneurs, who are the true basis for America's historic growth, prosperity and success (and who, unlike the government can and will fail if they dont allocated capital efficiently) the transferred debt (from household to federal) merely goes to fund the unproductive components of the US economy: the US government which by definition produces nothing, and the financial sector, whose only product is financial innovation which serves to make the TBTFs TBTFer, and pay record bonus after record bonus, and... that's it.
But wait, it gets better.
Recall, that as Reinhart and Rogoff, and numerous other analysts doing actual empirical analysis over the years have discovered, the threshold for sovereign instability in terms of debt/GDP is 60% (the number above which European countries will have to pledge their gold to Germany once the Redemption Fund kicks in in 6-9 months). So where are we now?
Sadly, nowhere. The chart below explains the problem: where in 2006 the global excess debt to hit the required threshold was only $7 trillion, most of it located in Japan, a decade later, or in 2016, this number has soared to $28 trillion!
Somehow, somewhere, the developed world will have to delever by just under $30 trillion over the next 4 years. Will this happen? No. Because as the chart above also reminds us, when we had the Lehman and Greek collapse, which combined accounted for precisely 0% in terms of debt/GDP reduction, the world almost ended. Think the world will somehow miraculously vaporize $28 trillion in debt any time soon?
In other news, today total US debt just hit a new all time record high of $15,944,869,685,894.92. The $16 trillion threshold will be breached in just about 2 weeks. When did America cross $15 trillion? November 16, or 9 months ago.
Over the past several years, there has been much speculation and numerous reports that America is deleveraging. It isn't. In fact, consolidated across the 5 different kinds of American debt, which takes into account not only federal, but also financial, municipal, household and non-financial, total debt as a percentage of GDP has not budged over the past 4 years and is flat at 350% of GDP. Which simply means that all of the household debt that has supposedly vaporized (at least until the next major Flow of Funds revision), all of which has taken place purely from discharges on uncollectable mortgage and credit card debt, has been replaced by federal debt, while financial debt has merely soared to take the place of the collapsing shadow debt which is imploding as the confidence in a Fed-free financial system erodes to zero. Which of course, is the worst possible outcome: instead of funding private, individual entrepreneurs, who are the true basis for America's historic growth, prosperity and success (and who, unlike the government can and will fail if they dont allocated capital efficiently) the transferred debt (from household to federal) merely goes to fund the unproductive components of the US economy: the US government which by definition produces nothing, and the financial sector, whose only product is financial innovation which serves to make the TBTFs TBTFer, and pay record bonus after record bonus, and... that's it.
But wait, it gets better.
Recall, that as Reinhart and Rogoff, and numerous other analysts doing actual empirical analysis over the years have discovered, the threshold for sovereign instability in terms of debt/GDP is 60% (the number above which European countries will have to pledge their gold to Germany once the Redemption Fund kicks in in 6-9 months). So where are we now?
Sadly, nowhere. The chart below explains the problem: where in 2006 the global excess debt to hit the required threshold was only $7 trillion, most of it located in Japan, a decade later, or in 2016, this number has soared to $28 trillion!
Somehow, somewhere, the developed world will have to delever by just under $30 trillion over the next 4 years. Will this happen? No. Because as the chart above also reminds us, when we had the Lehman and Greek collapse, which combined accounted for precisely 0% in terms of debt/GDP reduction, the world almost ended. Think the world will somehow miraculously vaporize $28 trillion in debt any time soon?
In other news, today total US debt just hit a new all time record high of $15,944,869,685,894.92. The $16 trillion threshold will be breached in just about 2 weeks. When did America cross $15 trillion? November 16, or 9 months ago.
Last edited by TheWholeEnchilada; 17th Aug 2012 at 03:14. Reason: fixed Book link (pdf download)
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Yes - Oil is a geopolitical tool and its price is manipulated.
The true cost of oil earth to bowser is about 15 USD.
So what.....
Let the spooks do their thing, thats why you pay taxes.
Financially, a little bit of knowledge is extremely dangerous. Buy some quality stocks from the ASX20 and get a good nights sleep.You will go MAD before you understand the Geopolitical/banking/economic/foreign policy underworld.
The true cost of oil earth to bowser is about 15 USD.
So what.....
Let the spooks do their thing, thats why you pay taxes.
Financially, a little bit of knowledge is extremely dangerous. Buy some quality stocks from the ASX20 and get a good nights sleep.You will go MAD before you understand the Geopolitical/banking/economic/foreign policy underworld.
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The true cost of oil earth to bowser is about 15 USD
Yes - Oil is a geopolitical tool and its price is manipulated.
You will go MAD before you understand the Geopolitical/banking/economic/foreign policy underworld.
Last edited by TheWholeEnchilada; 17th Aug 2012 at 09:52.
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Tick tock
Startling Evidence That Central Banks And WallStreet Insiders Are Rapidly Preparing For Something BIG
http://theeconomiccollapseblog.com/archives/startling-evidence-that-central-banks-and-wall-street-insiders-are-rapidly-preparing-for-something-big
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Gold is VERY Speculative.
No one knows which way gold could go atm. I would not even hazard a guess.
Buying sound companies at fair prices is the best option. The world will need Coca Cola and Johnson & Johnson et al regardless.
The US has the most gold and if everything turns messy, the USD will be King.
Since this post was started Many Stocks have gone up because interest rates are so low stocks have been attractive.
In the last 12 months some examples:
ANZ - Up 27%
CBA - Up 21%
CSL - UP 50%
TLS - UP 20%
WBC - UP 27%
These are solid companies with good dividends and proud histories. When the fear is gone, so are some good gains.
I guess it depends how close you are to retirement and your tolerance for Risk vs Rewards.
No one knows which way gold could go atm. I would not even hazard a guess.
Buying sound companies at fair prices is the best option. The world will need Coca Cola and Johnson & Johnson et al regardless.
The US has the most gold and if everything turns messy, the USD will be King.
Since this post was started Many Stocks have gone up because interest rates are so low stocks have been attractive.
In the last 12 months some examples:
ANZ - Up 27%
CBA - Up 21%
CSL - UP 50%
TLS - UP 20%
WBC - UP 27%
These are solid companies with good dividends and proud histories. When the fear is gone, so are some good gains.
I guess it depends how close you are to retirement and your tolerance for Risk vs Rewards.
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Again, there are just as many people predicting the economy will recover and the world won't have a massive financial collapse.
There are some people with "great educations" predicting this because if it happens, there is a lot of money to be made selling books.
For example, Harry Dent is predicting the dow at 3000 and he is a baker scholar from Harvard. He also worked for Bain for 10 years (QF's new strategy partner).
There are still a lot of ways to avoid a meltdown, so don't get to hung up on Doomsday scenarios. As wilco points out above, there are some good gains to be made in this climate.
There are some people with "great educations" predicting this because if it happens, there is a lot of money to be made selling books.
For example, Harry Dent is predicting the dow at 3000 and he is a baker scholar from Harvard. He also worked for Bain for 10 years (QF's new strategy partner).
There are still a lot of ways to avoid a meltdown, so don't get to hung up on Doomsday scenarios. As wilco points out above, there are some good gains to be made in this climate.