“The Word of the Day today children is Contango. Everyone take out your worksheets and your Number 2 pencils.” People of a certain age will remember those instructions from grammar school. Those same people will no doubt also remember the oil shocks of the 1970s.
What does it mean when the options price of a barrel of oil goes negative? Until yesterday that’s never happened. Not ever. The abstract paper price of this essential commodity has bumped up against physical reality at tank farms and pipelines far from Wall Street. It’s a bit like negative interest rates when you pay a bank for the privilege of given them your money. Welcome to the new abnormal folks. This ain’t right. Soon class will be learning a new Word of the Day. Backwardation. That’s a whole new kind of fun for the oil supply and the economy.
Everyone has a theory about what’s happening in the world right now. As humans we take what we see directly in front of us at this exact moment and we interpret it through whatever filter already exists in our heads. Then we reverse engineer our conclusions.
If you’re a naturally anti-authority type then the only part of the Covid-19 situation that matters to you is that idiots with no legitimacy are dictating whether or not you can go to the beach. Insert profanity here and directed it at your preferred political and cultural antagonists.
If you’re inclined to believe the health situation is genuine and the official responses are necessary and worth the trade offs in personal liberty than you may direct your angst at the rebels with a lot of hand wringing.
Of course, many people see our present circumstances as fundamentally an economic crisis with a peripheral side dish of cooties. Getting back to work and paying the bills has to take priority compared to letting a relatively small group of marginal people die off.
My next door neighbor and I are keeping busy making deliveries of “church basement” food to various friends. Carbs and lipids just as God intended. If the virus doesn’t kill them my cooking might. We drop things off at the door and run as we apply hand sanitizer.
Yesterday a neighbor was taken away by the EMTs. She’s a sweet lady and I hope she recovers. Would I be willing to see her – and a lot of other folks – dead if it meant we could open up the cafes and restaurants in the neighborhood? Is the quarantine cure more deadly than the virus? Is that a completely false choice? I have no idea. What I do know is that we have a set of hypercomplex interconnected systems that are so vulnerable to collapse that we can’t all just stay home for a month without the entire global economy seizing up and spirally into the abyss. We might want to take this opportunity to think about how to reorganize our affairs instead of trying to go right back to marching toward the same old cliff.
I see our present circumstances as part of a multi-act drama. The established authorities are committed to preserving the status quo at all costs. And a majority of the population wants to continue business as usual as quickly as possible. I expect individuals and lower levels of local organizations will increasingly be putting out fires at home while the higher ups attempt to keep failing systems held together with duct tape. Fine. So be it. My goal is to figure out how to put out those fires without mentioning it to anyone who might be empowered to get in the way. Mostly that involves quietly detaching from those failing larger systems wherever possible and building alternative means of support on the sly.