Residential Natural Gas Prices: A Consumer’s Guide

There are two main components to any natural gas bill. There is the cost of transmitting and distributing the natuarl gas and the commodity costs. Keep in mind there is also the sales tax which in Texas would be (8.25%)

Transmission and distribution costs - This involves transporting the gas through gas pipelines from the facility it is produced in to the local gas company and finally from the local gas company to a consumer’s house.

Commodity costs - This is the actual cost of the natural gas not including the transportation or anything else. Find gas’ current price here. NYMEX


The wellhead price also known as the commodity price of natural gas has made up more then 50% of the cost of natural gas. The efficiency of delivery and transportation of gas will further increase that percentage as technology continues to advance in that area. We have seen in the past 5 winters where natural gas at the wellhead has comprised the biggest percentage of the cost. The added demand and reliance upon natural gas will see the natural gas price rise as well. If you look at the power plants in Texas and the trend then you should know that the natural gas commodity is in high demand with almost a 91% correlation with the price of electricity in Texas we see the state that will most likely drive the price higher. Residential Natural Gas is not going to go down dramatically in price until more nuclear power plants are built to alleviate the demand off of natural gas. The resulting high natural gas prices can be attributed to several market factors. Weak natural gas production in the face of increased drilling levels, colder weather over consecutive weeks during the heating season, hurricane production disruptions in the Gulf of Mexico, decreased net imports, and record high crude oil prices are the primary factors as to why natural gas prices have reacted as they have. One often missed additional disruption is the Mexico natural gas pipeline sabotage which raised gas prices 15% during the month of September 2007.

Figure 1. Dissection of Natural Gas Prices by Residential Consumers

Heating Season

Mcf = Thousand cubic feet.

Issues That Change Current Natural Gas Prices

There are a number of issues that have prevailed for most of 2007 that have affected the gas price. Depending on the issue, each changes the price upward () or downward () in relation to the pressure on prices. These

Insolvent Financial System Signals Much Higher Gold Price

Dec 26, 2008 - 03:29 AM
by Jim Willie CB
Editor of the “HAT TRICK LETTER”
Home: Golden Jackass website
"..To begin with, the US so-called ‘Deflation Experience' is not deflation at all. Sure, many investments are losing value fast. Sure, much credit is being burned, with heavy write-downs. But new money is coming into the system from the corrupt bond swaps, historically unprecedented rescues, bailouts, and nationalizations. The $8500 billion in new commitments highlight the inflation side. Also, never confuse the ample supply of crippled assets brought from off balance sheets to actively accounted big bank balance sheets, distorting money supply figures, but just exposing the shell game. The deflation that many analysts describe is actually a systemic liquidation that will be difficult to reverse, a necessary step by producing the critically important inflation. It will come, but with difficulty. The US is not Japan in the 1990s, but something much much worse. The USFed and Dept Treasury, with lackey help from the USCongress, are not pushing on a string. They are rather trying to hold up a man whose skeletal structure is dissolving, while its circulatory system is also dissolving. THIS IS DISINTEGRATION. To argue otherwise seems pure folly and wishful thinking.

DEFINITION OF INSOLVENCY
...
The big banks to date have cornered over 80% to 90% of the official rescues and bailouts. They have also been invited to engage in a Treasury Yield Curve carry trade, wherein they borrow money cheaply at the rate of short-term maturities, then invest for yields at the long-term maturities. Wall Street has managed to hog the rescue bailout trough, while disseminating false messages about how the US Federal Reserve has enabled broad liquidity programs to assist the people. They are doing precisely the opposite. Over $800 billion has been DRAINED from the private banking system via Cash Mgmt Bills by the USFed in order to feed the Wall Street banks responsible for most of the fraudulent bond packages, for coercion of debt ratings agencies, and for commandeered crony regulatory inaction..."

Federal Reserve refuses to tell who is getting $2 Trillion of Taxpayers money

The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

Track this law suit: Bloomberg LP vs Board of Governors of the Federal Reserve System, 08-CV-9595

Follow the Bailout money: $ 8.5 TRILLION and counting

"Diane Lim Rogers, chief economist with the Concord Coalition, says her biggest fear is not hyperinflation and the social unrest it could unleash. 'I'm more worried about a lot of federal dollars being committed and not having much to show for it. My worst fear is we are leaving our children with a huge debt burden and not much left to pay it back.'"

The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.
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Net Worth
What investors can learn from Madoff scandal 12.21.08
People older than 70 1/2 will get mild IRA break 12.18.08
Soft landings in home loan crash 12.07.08
Retirement distribution rule changes proposed 12.02.08
More Net Worth »
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End result of federal rescue programs?

Inflation
Recovery
Crippling debt

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That sum represents almost 60 percent of the nation's estimated gross domestic product.

Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it's impossible to predict how much they will cost taxpayers. The final cost won't be known for many years.

Peter Schiff: Outlook for the Gold Market

Peter Schiff: Outlook for the Gold Market - Seeking Alpha: "The Wall Street Transcript recently interviewed Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital, Inc., on his outlook for the gold market. Key excerpts follow:...

Mr. Schiff: Because gold was priced in dollars, it's traded in dollars and so we all look at it as the dollar price, and the fact that gold has not made a new high in dollars during this economic crisis has led some to believe that maybe it's lost its luster, it's not a safe haven. But this rise of the dollar is very suspicious to me, I don't think it's justified. But it's been the unlikely beneficiary of all the problems. You've got the problem centered in the US economy; the epicenter of the financial crisis is in America. The reason that the world is in trouble is mainly because of bad loans made to Americans and it's our economy that I think is a complete facade, a house of cards that has now collapsed, so this dollar rally actually makes no sense.

And especially in light of the monetary policies that we pursued over the course of the last six months, the bailouts, the stimulus, all of the things that are likely to happen with Barack Obama saying that the sky is the limit on budget deficits, we're going to print money until we run out of trees. Everything that we are doing is so negative for the dollar, yet the dollar has managed to rally. So I think temporarily the fundamentals are on hold, but I think once the dollar really resumes its decline, you're going to see gold really shine again not only in terms of the dollar. It will continue to do well against other currencies, but it will do particularly well against the dollar..."

Leading Economic Indicators Point to Worsening Economy

EconomPic Data: Leading Economic Indicators Point to Worsening Economy: "Conference Board:

The leading index continued to fall in November, due mainly to large declines in building permits, stock prices, and initial unemployment claims, which offset the continued positive contributions from real money supply (M2) and the yield spread. Without the very large increases in inflationad justed money supply since September, the leading index would have been significantly weaker. The six-month change in the leading index has continued to fall -- to -2.8 percent (a -5.6 percent annual rate) in the period through November, down from -0.9 percent (a -1.7 percent annual rate) during the previous six months. In addition, the weaknesses among the leading indicators have remained widespread in recent months."

White House & Housing Crisis: timeline

courtesy of NYT

Price premium on 30 yr.US Bonds $ USB

longbond.jpg (image) Shows demand is so high / yield low, that they they are selling at a historical premium on fac value....
The worst case scenario is if the Dollar, Bond, and Equities start going down together as the world repudiates the US Dollar Reserve Currency and Credit Bubble.

This is not a probable scenario.

The last time it happened was in 1933 in the trough of the Great Depression.

But we may have the opportunity to see something as once-in-a-lifetime and memorable as John Law's Banque Générale and the Mississipi Bubble.

Let's hope the Federal Reserve can reach deeper in its pockets for a better class of tricks than just front running the dollar and the bonds until they fall over.

Certainly anything is possible, but it does appear as though the US Long Bond is hitting a 'high note' of improbable valuation unless the world accepts a single currency dollar regime....30 year treasury bonds
long term dollar index

Shock to system: domestic civil unrest and the US Military

In a column by Steve Watson & Paul Watson at Alex Jones' Infowars.net, "Army 'Strategic Shock' Report Says Troops May Be Needed To Quell U.S. Civil Unrest," we find that that even those who are not ordinarily prone to hyperbole and hysteria are contemplating scenarios that might once have been dismissed as the ravings of lunatics and conspiracy theorists.

"Purposeful domestic resistance" would require military to "rapidly determine the parameters defining the legitimate use of military force inside the United States."

A recent report produced by the U.S. Army War College’s Strategic Institute warns that the United States may experience massive civil unrest in the wake of a series of crises which it has termed "strategic shock."

The report, titled Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development, also suggests that the military may have to be used to quell domestic disorder.

"Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security," the report, authored by [Ret.] Lt. Col. Nathan Freir, reads.

"Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters are all paths to disruptive domestic shock." it continues.

Still no credibility on Wall St?

Bonuses paid from TARP plan bonuses are about half of the money required to put some health into the US automotive sector

Jesse's Café Américain: "Since a significant portion of the anticipated losses will be coming from writedowns in commercial real estate the projected reports are probably difficult to make with accuracy. The Banks have a great deal of accounting discretion, and it is probably tied to their tax and public relations strategy among other things.

As you may recall, there was quite a fuss when it was reported that Goldman was setting aside $7 billion of its $10 billion in TARP money to be paid out in bonuses this month. To put it into perspective, those bonuses are about half of the money required to put some health into the US automotive sector.

Goldman and Morgan have been paying more attention to the outrage in the public and the Congress since then, but they are still on a heady Masters-of-the-Universe fast track"

New Media - Diet Coke InStyle Series

brought to you by Digital Broadcast Group

brought to you by Digital Broadcast Group
Diet Coke’s newest venture “Style Series presented by Diet Coke” kicks off next Tuesday with exclusive appearances from artists Robin Thicke and Rihanna and designer Cynthia Rowley. The show combines branded entertainment and digital syndication to make a very promising advertising campaign.

Fans can watch the show through several mediums: Times Square billboards, mobile, at DietCoke.com, and through other strategically placed ads on the Web.

The program is a product from two innovative ad agencies: MediaVest and Digital Broadcasting Group. The campaign is described by Adweek’s Brian Morrissey as, an old school concept of sponsored content that attaches the many options of digital distribution.

“We're guaranteeing viewership. They know what they're going to get,” asserts Chris Young—CEO of DBG. Currently the branded entertainment company is looking for footage of live events to create short-form content for those who missed the live performances..."

Five Critical Decisions Leading to Our Financial Crisis: Joe Stiglitz Presents His Analysis

10 December 2008
Five Critical Decisions Leading to Our Financial Crisis: Joe Stiglitz Presents His Analysis
by Jesse at http://jessescrossroadscafe.blogspot.com/
This is a benchmark document, a starting point, for finding our way out of the wilderness.

It validates the points that quite a few economic bloggers have been making for some time, with great effect because of Joe Stiglitz' reputation and accomplishments in his field.

Here is a summation of the Five Major Causes of our financial crisis. As Joe so correctly observes:

"What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments."
Reagan's nomination of Alan Greenspan to replace Paul Volcker as Fed Chairman

The Repeal of Glass-Steagall and the Cult of Self-Regulation

Bush Tax Cuts for Upper Income Individuals, Corporations, and Speculation

Failure to Address Rampant Accounting Fraud Driven by Excessive and Flawed Compensation Models

Providing Enormous Bailouts to the Banks without Engaging Systemic Reform for the Underlying Causes of the Failure

There are other points that might be added, some that are not strictly financial in nature.

1. An international monetary exchange system that facilitates manipulation to create de facto barriers and subsidies in support of industrial trade policies. This creates destabilizing surpluses and deficits which may be the source of the next stage of the financial crisis.

2. The concentration of the ownership of the mainstream media in a handful of corporations has had a chilling effect on the newsrooms and commentators.

3. The lack of Congressional courage in exercising its obligations with regard to the extra-Constitutional excesses of the Executive Office. Certain mechanisms and instruments that facilitate the unilateral exercise of presidential power are tipping the balance of powers.

4. The existing system of funding inordinately expensive political campaigns is a breeding ground for favors and corruption.

The undue influence on prices, particularly global commodity prices, that is exercised by a handful of US banks operating far outside of traditional banking charters. This is a dangerously destabilizing influence on the real world economy and industrial growth and investment. A significant step forward would be the imposition of position limits, greater and more timely transparency for those with more than 10% of any market's open interest, and an uptick rule with stronger enforcement against naked shorting and other forms of short term price manipulation.

EERE Energy Savers: Sealing Air Leaks

EERE Energy Savers: Sealing Air Leaks: "How Does the Air Escape?
Warm air leaking into your home during the summer and out of your home during the winter can waste a lot of your energy dollars. One of the quickest dollar-saving tasks you can do is caulk, seal, and weatherstrip all seams, cracks, and openings to the outside. You can save as much as 10% on your heating and cooling bill by reducing the air leaks in your home....

Air infiltrates into and out of your home through every hole, nook, and cranny. About one-third of this air infiltrates through openings in your ceilings, walls, and floors."

Going Green at Home - insulation

Insulation Fact Sheet: "Why Insulate Your House?
Heating and cooling account for 50 to 70% of the energy used in the average American home. Inadequate insulation and air leakage are leading causes of energy waste in most homes. Insulation:
saves money and our nation's limited energy resources
makes your house more comfortable by helping to maintain a uniform temperature throughout the house, and
makes walls, ceilings, and floors warmer in the winter and cooler in the summer..."


Norton's comment: when considering where you have heat loss in your house, these are the three kinds to consider. Plus, each of these barriers need to located in the same place. from Norton, Certified Maine home energy auditor.

Currencies - Long Term

Currencies: "Main currencies, longer term"
Norton's comment: looks like we are headed for a stronger us dollar for a while as the World recession finds it a relatively safe haven. Deflation will show up also for a while until the Treasury printing presses break down and foreign investors question the backing of the US dollar as fiat currency. It appears that China and Saudi Arabia are quietly beginning to sell off their us dollars from their reserves and increasing their store of gold bullion.

US Energy Use Sources

Introduction: The Historic Role of Energy Efficiency

Energy efficiency has long been a national public policy priority, and has made a substantial contribution to the nation’s energy supply, thereby "lightening the load" on our electricity generation, transmission, and distribution system. Analysis by the Alliance to Save Energy, illustrated in Figure 1 on the next page (Alliance, 1998) reveals that energy efficiency - the energy saved by improvements in energy efficiency implemented between 1973 and 1998 – made energy efficiency the nation’s second largest source of energy (and largest domestic resource) by 1998. This analysis accounted for changes in energy intensity due to structural changes in the economy, such as a decline in energy-intensive industries and the increasing share of GDP derived from services. While steep increases in energy prices were undoubtedly a strong driver for improvements in energy efficiency, much of the improvement was purposeful, policy-driven, and accomplished through targeted research and development and technology deployment programs.

Interest Rates Race to Zero Worldwide

PEG - price/earnings-to-growth ratio

What exactly is PEG, and why is it important?

A: PEG stands for price/earnings-to-growth ratio and refers to a stock’s P/E ratio divided by the company’s projected longterm earnings growth rate. The reason we find it so useful is that it’s a way of seeing how the market is valuing a company’s growth; it is a measure by which you can judge if a stock's P/E and price are reasonable for its growth rate. For this reason, PEG is more significant than the P/E ratio alone, even though investors tend to focus more on P/Es. Typically we seek stocks with PEG ratios below that of the sector (where PEGs are applicable). The key with PEGs, of course, is to make sure that your estimates of growth are on target. The other way to look at PEG ratio is how much the market is paying for the unit of growth. Generally, investors are willing to pay more for a stock that is expected to grow rapidly

Hirsch Report: DOE on Peak Oil 2005

What our government knows by Alternative Energy Association (Robert C. Hackney)

"In 2005, the US Department of Energy published a report titled “Peaking of
World Oil Production: Impacts, Mitigation, & Risk Management.”

Known as the Hirsch report, it stated,'The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.'

The Hirsch Report is the scariest 91 pages you will ever read, and it’s not fiction. According to the Hirsch Report, world oil peaking is going to happen, and will likely be abrupt and revolutionary...."

PDF of Full Report HIRSCH REPORT 2005

Credit Default Swaps on Selected Sovereign Reference Credits (weekly)

Financial Sense Online  Market WrapUp with Michael Panzner 12/04/2008: "In recent months, policymakers around the globe have opened up the monetary and fiscal spigots in an attempt to counteract the credit crunch. Although safe haven buying has helped buoy prices on government bonds in spite of the budding tsunami of future supply, there are signs that investors are growing nervous. Premiums on credit default swaps (a type of derivative providing insurance on creditworthiness) for a wide range of sovereign reference credits, including the U.S., Germany, and the United Kingdom, have shot up, suggesting markets are beginning to price in an eventual -- and widespread -- loss of faith in government-issued debt."

Racing Towards Zero - interest rates worldwide

Racing Towards Zero The Big Picture: "Racing Towards Zero"

Enough Financials Already! Some Fun!

POPWRAP Gossip Entertainment News: "Sorelli sisters"

Recession is 'Official:' Is It Time To Look Forward?

THE FINANCIAL PHILOSOPHER: Recession is 'Official:' Is It Time To Look Forward?: "'You cannot see the mountain near.' ~ Ralph Waldo Emerson
Now for some perspective: From the high mark on October 9, 2007, to the recent low mark put in on November 20, 2008, the price movement of the S&P 500 is a 51.93% decline. Of course, we will not attempt to 'call a bottom' or make any predictions here, but let's make a few observations with specific reference to data (and following table) taken from Fidelity's Market Analysis, Research & Education

Dollar index - Long Term with annotations

Long Term View of US Dollar Index

Auditors fault Treasury oversight of bailout funds - Yahoo! News

Auditors fault Treasury oversight of bailout funds - Yahoo! News: "WASHINGTON – The government must toughen its monitoring of the $700 billion financial bailout to ensure that banking institutions limit their top executives' pay and comply with other restrictions, federal auditors said Tuesday in the first comprehensive review of the rescue package.
The Treasury Department has no mechanism in place to track how institutions are using $150 billion in taxpayer money that the government injected into the banking system as of last month, the Government Accountability Office concluded in its report to Congress."

Norton's comment: Surprise, surprise! Put kids in charge of a candy store, and expect them to eat it all and denie it all. Human nature is at work here. But we MUST insist on better. It is our money!

Junk-Bond Market Has Closed the Door

Yields Upward of 20% Make It Too Pricey for Borrowers; Zero Deals Made It in November

Financial Armageddon: "About 50% of U.S. companies have below-investment-grade credit ratings, making the $750 billion junk-bond market a vital source of financing for car makers, airlines, retailers, utilities, restaurant chains and media companies
>The next chart is making things even scarier........ Within the 'junk' label the remaining 'quality' has deterioting fast and furious especially over the past few years.........."

Why Aren't Rating Agencies Moving U.S. Treasuries to Junk Bonds? - Seeking Alpha

Why Aren't Rating Agencies Moving U.S. Treasuries to Junk Bonds? - Seeking Alpha: "In my last article I talked about the folly of rating agencies and US financial system. Considering the junk that most US financial companies hold today without disclosing it openly and that the US government is slowly acquiring that junk by giving them dollars for it, I wonder why rating agencies are not downgrading the US treasury rating to junk. The system of fiat money is very interesting because a government can print as much of it as it wants. And the US government must have installed a few new printing presses recently to provide all the dollars it's showering on failed financial institutions, its war and its public in general....

while the US government borrows it to lavishly spend on wars, to provide $200K houses and $25K cars to people with no means to pay for it and to allow its wealthy people to lower their taxes. And most unfortunately, everyone seems to be ok with it.

But the disastrous consequences of this are being felt all over the globe. I wonder if rating agencies will work again in a reactive manner in this case by taking action only after every global investor realizes the folly of it. Or will they have the courage and wit to inform global investors by acting proactively? Because if fiat money allows the US government to maintain its AAA ratings, then every country in Africa or the third world should also get a AAA rating.

In either case, it's not too far away before global investors, including China and other Gulf countries, realize their mistake..."

PIMCO cancels dividends

Jesse's Café Américain: "Pimco cancels dividend payments for 6 funds
December 01, 2008: 10:03 AM EST

NEW YORK (Associated Press) - Pacific Investment Management Company Inc. on Monday canceled announced dividend payments for six of its funds, saying the weak market has pushed the value of those funds below legal thresholds.

The dividends declared Nov. 3 that were scheduled for payment Monday will not be paid for:
Pimco New York Municipal Income Fund,
Pimco Municipal Income Fund II,
Pimco California Municipal Income Fund II,
Pimco Municipal Income Fund III,
Pimco California Municipal Income Fund III
Pimco New York Municipal Income Fund III.
'Continued severe market dislocations and recent further erosions in the municipal bond market have caused the values of the Funds' portfolio securities to decline,' the company said"...

S & P: a Historial Perspective

Jesse's Café Américain: "Here is a chart with the monthly actuals added to it. The decline has progressed more quickly than anticipated.

If you start reading the blog entries in 2007, one can see how the case for recession was carefully built up based on the indicators, and the probability steadily increased from an estimate of 65% in early December.

Although fundamentals don't work in the short term, in the longer term the markets work, and the fundamentals count, probabilities pay off, and there is a reversion to the means. The trick in trading is not to be trapped by leverage, timeframes and capital risk.

Once again a special thanks to our friend Elvis_Knows for his excellent graphics."

US Treasury 10-yr CDS hits record high | Markets | Bonds News | Reuters

US Treasury 10-yr CDS hits record high | Markets | Bonds News | Reuters: "LONDON, Dec 1 (Reuters) - The spread or risk premium on 10-year U.S. Treasury credit default swaps hit a record high on Monday, extending a recent trend as market participants continued to fret about the scale of the government's financial rescue programmes."

Norton's comment: OUCH! Here goes the CREDIT RATING OF US TREASURIES.........then the flight from the US Dollar as fiat currency. Dare I say the Iceland just filed SU bankrupcy to be saved from US obligations.

Municipal Bond Insurance Downgrades: The Next Hit for the Taxpayer | Corrente

Municipal Bond Insurance Downgrades: The Next Hit for the Taxpayer | Corrente: "Municipal Bond Insurance Downgrades: The Next Hit for the Taxpayer

Corporatism Economic Apocalypse Department of All The Damn Gall
Mon, 11/10/2008 - 12:31pm — BDBlue
The economic meltdown isn't limited to the bailout. We're going to be paying for the risks taken by banks and insurance companies in lots of ways. Such as having to pay off 30 year bonds in 10 years. That will cost you. And I do mean you. (The cuts in programs are just starting.)
Here's how it works....

Wait, how can insurance companies that never pay claims be in trouble?

Earlier this decade, they started insuring something besides municipal bonds: subprime-mortgage-backed securities. Enough said.

Like requiring them to be paid by the municipality in 10 years instead of 30. So instead of paying $1 million a year, a school board might have to pay $2 or $3 million a year on the bonds.

Where do you suppose the school is going to get that money?

As the NPR reporter says, "It's as if you bought auto insurance, and then your insurance representative came over to your house, got liquored up, totaled your car, handed you back the keys and said, that'll make your rates go up.""

Record Fed Borrowing- what affect on value of USD?

Fed Borrowing

Ouch!