---
title: "Velocity Crack-up"
url: https://independentstockanalysis.com/velocity-crack-up/
description: "“Are there any signs of a budding recession? None that I can see in the recent data.” Followed by: “With almost $7 trillion sitting in bank savings…"
published: 2013-02-04
updated: 2013-02-04
---

# Velocity Crack-up

Published 2013-02-04

Posted on

by

J.J. Butler

“Are there any signs of a budding recession? None that I can see in the recent data.” Followed by: “With almost $7 trillion sitting in bank savings deposits earning practically nothing, and with tens of trillions invested in risk-free assets around the world, there are therefore many millions of people and investors who need a recession to justify their current asset allocation.” [Scott Grannis](http://scottgrannis.blogspot.com/2013/01/avoiding-recession-is-all-that-matters.html)

[Josh Brown](http://www.thereformedbroker.com/2013/02/02/ray-dalio-schools-you-on-the-great-rotation-debate/) then explains the velocity of money thing. [More color](https://www.santangelsreview.com/2013/01/27/transcript-of-ray-dalios-comments-at-davos/). The beginning of the crack-up boom?

Bakken oil boom in North Dakota might last for 100 years says [Mark Perry](http://www.aei-ideas.org/2013/01/bakken-oil-boom-in-north-dakota-might-last-for-100-years/#.UQx9kubU9Mk.twitter). This is dependent, of course, on technology advancing significantly enough to multiply recovery rates.

Thanks to the Eagle Ford, The amazing increase in Texas oil – output has doubled over the last three years and completely reversed a 22-year decline by [Mark Perry](http://www.aei-ideas.org/2013/02/the-amazing-increase-in-texas-oil-output-has-doubled-over-the-last-three-years-and-completely-reversed-a-22-year-decline/).

Conversely, from a *friend*: “Yesterday Royal Dutch shares fell 2.7% after reporting weaker than expected US and Asian production. The reserves replacement ratio was just 44%, and even its forecast for the next 3 years of 84% hardly inspires confidence that volumes are sustainable. To lift that replacement ratio to 84% the company pledged a net $33bn capital spending next year.”

About those refining margins at [Raymond James](http://www.raymondjames.com/Branches/c2c/7ho/Whittakercooper/resource.asp?page=energy_stat.htm).

Natural gas prices aren’t going anywhere. [Kyle Cooper](http://www.rbnenergy.com/sites/default/files/KCCI_2013_0201.pdf)

Who hired last month:

|  |
|---|
| Jan-2013 Change in Nonfarm Private Employment by Company Size (source: ADP) |

Chart of the day: US recession probability is down to 0.20% by [Mark Perry](http://www.aei-ideas.org/2013/02/chart-of-the-day-us-recession-probability-is-down-to-0-20/).

Seven football investing lessons at [Above the Market](http://rpseawright.wordpress.com/2013/01/31/7-super-bowl-investing-lessons/).

Fascinating, though not immediately relevant: America’s Baby Bust: “The nation’s falling fertility rate is the root cause of many of our problems. And it’s only getting worse.” [WSJ](http://online.wsj.com/article/SB10001424127887323375204578270053387770718.html)