Friday, December 16, 2005

Winter Waaaahderland

by Tom Bozzo

Days until the winter solstice: 5.

Heating degree-days, normal month-to-date (12/15), Madison: 588.

Heating degree-days, actual month-to-date (12/15/05), Madison: 733.

Price of natural gas (NYMEX Henry Hub Future): $13.38.

Remaining tolerance for winter: 0%.

Number of times my car has gotten stuck in the snow within 100 feet of the driveway, despite electronic driveability doo-dads: 4.

Time until new all-wheel drive car arrives: Not soon enough.

Sight of John decorating graham cracker cottage at Nursery School, licking icing off: Cute!

Sight of John projectile-vomiting said icing across kitchen, all over Suzanne: Not cute!

Sight of mommy and daddy joining John in the stomach bug derby: Just pathetic.
Not to be too serious, but I think the coming home heating crunch is going to be more painful than the (apparently) temporary spike in gasoline was in September. From my own heating bills, I see the massive increases (and massive is not overstating the percentage increase in natural gas over the last 6 months) has yet to fully show up. I suspect this will catch a lot of people by surprsie, much more so than the immediate and fairly transparent price increases in gasoline. Couple this worrisone inflationary sign and a cooling in home prices and I think you'll see some major turbulence in the first half of '06.

Poor Mr. Bernake will be caught between a rock and a hard place: debt and inflationary pressures augering for higher interest rates, while a slowdown in consumer spending pushes the economy towards recession. But hey, maybe the party of fiscal restraint will wake up and think seriously about eliminating tax breaks for the wealthy and cutting spending in, say, places like Iraq.


We're still waiting for our gas-shock-absorbing pellet stove to arrive. At this rate, it will be set up just in time for spring.

I hope you all are feeling better soon. Family stomach bugs are about the least amount of fun you can have.
Paul: I'd think that few people had to buy much gasoline at the peak prices; certainly not to the tune of the several hundred bucks extra we're supposed to have to pay for the heating season up here. I'm just glad I don't heat with oil, which I understand is running about $2/therm.

A good question is where prices will settle down. The conventional (optimistic) wisdom seems to be that natural gas will settle back to the levels of a few years ago sooner or later -- if not soon enough for this heating season. Something like that was said about oil, too, though now expectations are for persistently high prices.

I also agree that Bernanke will have his work cut out for him, trying to make sure that none of the accumulated imbalances blow up on us.

PS: Thanks. Julia and John had it first; they're better now. Suzanne seems to have the unpleasantly long tail of this thing.
Facing childhood illnesses (and knowing you're likely next in line to get the bugs) are, in my mind, the worst aspects of parenting. I had forgotten about those pre-holiday viruses that can really mess with your days. I guess you can be glad it all came early and is near resolution.
Notice I did not end this with the words "see you soon." Let's, errr, wait a bit for a visit.
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