Welcome To Josh's Blog O' Thoughts: October 2008

The Oil Bubble Burst!

Friday, October 31, 2008. 4:43 pm. Posted by Josh.

I'm sure everyone has noticed lately that gas prices have been coming down. In my part of the country, we are almost back below $2 per gallon. (I still can't believe we're happy to be paying $2 per gallon). Part of the reason for the decrease in gas prices is the decrease in oil prices. Oil topped out somewhere around $140 per barrel back in July. It is currently trading around $65 per barrel. That's about a 50% decrease in just a few months.

So what about all these people that a few months ago said oil would NEVER come back down below $100? They said that oil prices going up was purely a function of increased demand and stable supply. Well some of us (myself included) disagreed. Check out a few of my previous blog posts:
More Signs Of Oil As The Next Big Market Bubble - June 16, 2008
Are Crude Oil Prices A Bubble Waiting To Burst? - November 7, 2007

My take on the situation was that while there probably was some increase due to demand, the increase in oil prices was disproportionate to the demand increase. This led me to believe that investors were throwing their money into oil to try to make a quick buck. It's one of the things we do best in this country. We see someone else get rich and we copy them so we can also get rich. Eventually TONS of people are involved in the same investment plan. But when we find out that most of the people buying are just get-rich-wannabes, prices collapse. In recent history you could easily refer to the housing market bubble, or the tech industry bubble.

So, I hate to say it, but...

"I told you so"

It's pretty obvious now that a huge portion of this price increase was due to speculative buying by investors. Check out this interview with Scott Bleiler, president of CreateCapital.com. He claims the price increases were solely due to speculative buying. I won't go quite that far. While I do think that maybe 90% of the price increase & decrease was due to speculative buying, I also think prices were also moved a little by changes in demand and the strength of the US dollar. But again, spec buying was the largest part.

Now that I got that out of the way, I can comment on how annoying OPEC is. When prices where out of control this summer, we were practically begging OPEC to increase supply to help lower prices. Their evaluations showed that supply and demand were matched fairly well so they did not increase output. Now that prices have come back to reasonable levels, they decide that they liked it better when they were getting $100+ per barrel so they've decided to decrease output. That is a pretty obvious slap in the face to us. I'm so glad that the recent ncreases in the strength of the dollar helped nullify their supply reductions to meaningless. It literally had no effect on the price of oil. Yet another indication that the price of oil does not move based solely on supply-demand.

That pretty much sums up how I view the whole oil market situation over the past 2 years. Now when will prices of other goods (food, retail, air travel, etc) that went up "due to the increase in fuel costs" go back down? Not any time soon is my guess. Many retailers tried to wait as long as possible to raise prices. This means some may have taken significant losses during those periods. As a result, they will probably be hesitant to reduce prices so they can recover some of those losses. And good luck for airfare. The only way that will come back is if one of the airlines starts a fare war.

To conclude this post, I just want to say that it was a great marketing ploy run by Chrysler this summer. Buy a new car and they would guarantee you $3/gal gas for 3 years. They got a person to buy a car with this deal in mind and now they don't have to pay anything out for it. Great job marketing, Chrysler.


If you want to leave a comment, I'd be interested in hearing what gas prices are doing in your neck of the woods.

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Posted in: Economics , Energy Efficiency , Finance , Global Warming , Gripes
This article has been viewed 136 times.
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Planting A New Lawn - Fall Overseeding

Thursday, October 23, 2008. 1:19 pm. Posted by Josh.

As my readers know, I moved into a new house last winter, and this past spring began the process of Planting a New Lawn. I have tried to document my progress on this blog (see previous posts), so I thought I should continue by posting a fall update.

During the spring, I had a decent amount of seed wash away from heavy rains, which also created some lovely ruts in the yard. The summer saw a bumper crop of foxtail and other weeds sprouting up. I pretty much gave up on the yard work in July and decided to wait until fall to work on it more.

My goal this fall was to get more grass out there so that when the annual weeds started to die off the grass could take over. If you read recommendations on overseeding a yard, you will generally see that the "experts" recommend killing all vegetation and starting from scratch if you have more than 50% weeds in your yard. I wasn't exactly sure of my grass-to-weed ratio, but there were a LOT of weeds. The recommendation to start from scratch has some merit, especially if you are doing a small area, but everyone I talked to thought it was crazy to kill what I already had. Based on this, and my personal sentiment of not wanting to purposely destroy my hard work from the spring, I decided that I would try to renovate rather than restart.

The best time for fall renovation for cool season grasses is the last two weeks in August through the first two weeks in September. I started a little later than I would have liked, but still had my seed down by Sept 17th. Here's the process I used:


1. Purchase a Tractor
The first thing I did was to purchase a lawn tractor. I had been planning to do this, but just hadn't gotten to it. Mowing the 1 acre yard with a push mower was getting tiresome, and I knew the tractor would be handy during renovation. I ended up with a 23 HP Husqvarna with 48" Mower Deck:
Husqvarna YTH2348

2. Fill Ruts
The next step in my plan was to get some dirt and fill the ruts that were created this past spring. I found a place with reasonable prices and had a dump truck load of top soil delivered to my house. This stuff was much blacker dirt compared to the clay my yard is made up of.

I also purchased an Agri-Fab 8 cu ft Poly Dump Cart to help me haul the dirt around to my various ruts:
Agri-Fab 8 cu ft Poly Dump Cart

This part of the process was not difficult, just labor intensive. Fill the cart, unload the cart, smooth, and repeat. Unfortunately, a few days of rain interrupted my plans, and in order for me to get my seed down by mid-September, I had to cut my rut-filling short. So I have some left over dirt and some left over ruts for next spring.

3. Cut The Grass Short
I was able to use my new tractor to cut the current grass pretty short. Some places I even hit dirt which didn't make me feel too good about using the new tractor.

4. Core Aerate
In order for grass seed to grow, they have to be in contact with dirt. If you were overseeding a small area, you might just be able to rake the top of the soil to loosen it up. With a large area of clay, that wasn't happening. Instead, I decided to core aerate. This is the process of pulling plugs of dirt up out of your yard. It's supposedly one of the best things you can do for your grass as it relieves compressed soil (especially clay) and allows air, nutrients, and water to reach the roots. For overseeding, it helps because it creates holes of exposed dirt and deposits dirt cores on top thus creating pretty good soil contact for the seeds.

To do this large area, I purchased a Brinly 40" Pull Behind Core Aerator:
Brinly 40

I also purchased 4 cinder blocks to place in the weight tray. I attempted aerating 2 days after a decent rain shower and the thing worked flawlessly. It pulled 2-3" plugs out of the dirt. The only problem was that some of the plugs were slightly muddy and stuck to the tractor wheels on subsequent passes. I tried to make about 3-4 passes in different directions, but in some areas, it was only possible to go one direction and the additional passes seemed to just be hitting the already existing holes.

5. Seed and Fertilize
I purchased another 100lb of Kentucky Bluegrass and 50lb of Perennial Ryegrass. This is higher than the suggested overseeding rate, but I wanted to lay it on kind of thick. I also purchased four 32lb bags of starter fertilizer and three 32lb bags of standard fertilizer (high N content). I used my broadcast spreader to spread all these materials over the lawn in several passes. I ended up only using 6 bags of fertilizer, and saved some seed to fill in bare areas later on.

6. Work the Seed In
To get even better seed-to-soil contact, I used a piece of chain link fence. I got a piece about 4' x 6' for free from someone throwing some away. I hooked it up behind the tractor with a couple chains, put my cinder blocks on top of it to weight it down, and pulled it over the yard several times. It had been a day since I had done my aerating so the cores I had pulled out were all dried by then. The chain link was pretty effective in pulverizing the cores. This helped cover the seed with a layer of loose dirt. The dragging also helped knock some of the seed down into the aerator holes where they seed got excellent soil contact.

7. Water
So far, I have found watering to be the worst part of yard work. For one, I feel like a heel for using all the water. Secondly, it is darn near impossible to cover an acre of ground. I did my best to get most areas of my yard wet at least once a day. Other than that, I had to hope for some light rains.

The Results
After about 10 days I was seeing sprouts, especially in the aerator holes. What's more, the sprouts were KBG sprouts not rye (based on the seed hull still attached). Also during this time, the water and fertilizer helped the existing grass start to grow and fill in. After a couple weeks, the existing grass had grown enough that I had to mow again. I tried not to damage any seedlings and think I did a pretty good job. The cool weather put the annual weeds into retreat so they didn't look nearly as bad. However, I did have clover start to pop up throughout the yard. At any rate, I think things started looking pretty good. Here are the pics from 10/05/2008, about 3 weeks after my overseeding.

Front yard:
Front yard after fall overseeding

Back yard:
Back yard after fall overseeding

Front yard closeup (this is one of the best spots in the yard):
Closeup of KBG after fall overseeding


So I'm pretty much done with my yard work for this year. Next spring, I'll be focusing on weed killing. I'll be putting down a pre-emergent to help prevent the annual weeds, and might spray for any broadleafs and clover that come up in the spring. Because of the pre-emergent, I won't be doing any overseeding in the spring. I will however, aerate and fertilize to keep the ground from compacting and help the existing grass spread. I'll make sure to post an update next spring.

Comments welcome!

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Posted in: Lawn Care , Planting A New Lawn
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Comments: 1

An Apology To Strangers

Tuesday, October 21, 2008. 11:55 am. Posted by Josh.

I was recently in Las Vegas for a business trip, and in the evenings, my wife and I would spend time on the strip seeing the sights of Las Vegas. However, on Thursday, 10/16/2008, an incident occurred that I would like to bring up.

Just outside of the MGM Grand hotel, in front of the MGM lion statue, a couple asked if I would take their picture for them. The man started to show me how to use his camera when I noticed it was the exact same model that I had. I took their picture facing the New York New York hotel, with the Statue of Liberty in the background. I returned the camera and left.

Later at dinner, I noticed that my camera had the lens cap on. I thought I had put the lens cap in my pocket so I reached in there to see and I found another lens cap. Apparently, when I used the other guy's camera, I accidentally stole his lens cap! I must have mistakenly put it back on my camera.

I know it's a pretty cheap little piece of plastic, but I felt pretty bad about it. This couple, who seemed really nice, asks me to take their picture and I end up stealing their lens cap. Of course, we didn't see them the rest of our trip since there are literally thousands of people milling around there.

Anyway, I had no way to get it back to them, so I still have it. I thought I'd mention it here. It's kind of funny if you think about it, although I still feel bad about accidentally stealing it.

If you happen to know someone that was recently in Las Vegas and had their lens cap stolen, please forward them a link to this post. This also seems unlikely, but you never know.

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Posted in: Misc
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Comments: 0

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