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Old 09-25-2015, 07:48 AM   #1
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Doodoo Coal mine is crowded with canaries - make room for Brazil

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Reader Lucas from Brazil writes about the "perfect storm".
Quote :
Hello Mish

Brazilian interest rates are skyrocketing. Rates went up more than 2 percentage points in a month. Bond trading was suspended due to the quick devaluation.

Nobody is talking much about it, but energy corporation Petrobras is down 95% from the peak (in dollars). They have a high dollar exposure, and some estimates say that since June, Real devaluation alone was responsible for a +R$100B increase in debt.

Brazil's majors oil investments are in (really) deep water drilling, and they may be not worthy anymore. Petrobras debt is now equivalent to 8% of the whole country GDP.

And while. our president doesn't have support to do anything.

It's a perfect storm here.
...
More: http://globaleconomicanalysis.blogsp...e-careful.html
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Old 09-26-2015, 02:17 PM   #2
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I also suspect that all the money they are having to spend trying to get ready for the Olympics with the hope they rake in more than they spend (rarely works for a host country over the last century+) will end up making the situation worse, kind of like it did for Greece.
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Old 09-29-2015, 07:39 PM   #3
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...

A friend of mine sells capital equipment (mostly big pumps & compressors) to refineries and chemical plants in South America. He has been telling me for a few weeks now that S America is dead in the water. Brazil & Argentina have completely halted their buying.

Even Peru, Chile and Colombia have slowed a lot.

Bearing sales are hanging in there, but we are on notice that they could grind to a halt at any moment.

Even though replacement parts are often bought instead of new cars, our business there follows the Peruvian business cycle fairly closely.


EDIT:

This is an important subject to be following. China and S America are down for the count. Europe is under siege. Japan is flailing. When does America get hit?
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Last edited by DoChenRollingBearing; 09-29-2015 at 08:06 PM. Reason: Another thought
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Old 09-30-2015, 07:30 AM   #4
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DoChen, we're seeing it slow down in construction and capital projects here at home. In 2013 my firm bid and won a huge project that we're wrapping up right now, and there's no replacement project in the pipes. We managed to drag down enough backlog to carry forward through 2016, but just barely. It's 2009 all over again. While it's ugly as hell, we're far, far better positioned to weather a bad storm, having learned some very hard, ugly lessons from the past storm. We are cash heavy and resource long. We have no debt to speak of and our machine has never been so lean as it is righ5t now. It kind of sucks not to have a fat admin group, and to have to work those extra eight hours a week doing some of the menial shit I now do, but when stacked against the probability of unemployment, I'll take it brother, I'll take it any day. Last time we nearly closed the doors.
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Old 09-30-2015, 12:03 PM   #5
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blighty still humming along nicely.

Word is that there are some serious gov budget cuts being discussed, now that the election goosing money is about done though.

Kinda looking forward to being able to drive places without all the traffic holdups as the population seems to be on the move, busy going nowhere.

Thinking about restocking the fuel store but Im told diesel doesn't keep so well now its blended with ethanol ?
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Old 09-30-2015, 02:07 PM   #6
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Diesel blended with ethanol? I don't think so. The fact that ethanol has such an incredible affinity with water would make that stupid to do right out of the gate, but the EU isn't known for their brilliance when promulgating their environmental rules now are they? Also, diesel should be right between 40 and 42 cetane rating, and adding alcohol would lower it, probably below the designers recommendations for operations. Unlike gasoline, diesel will spontaneously ignite under compression. It contains more of the volatiles than gasoline.
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Old 09-30-2015, 04:27 PM   #7
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Add some Pri-d to the diesel and it will last several years.

http://www.priproducts.com
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Old 10-01-2015, 01:56 PM   #8
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they insist on a % of bio something ( probably not ethanol then ) in the diesel and Im told its more likely to allow the algae monster get loose. Not a problem with high turnover but it took me 7 years to get through the last lot.

Will look at Pri-d thanks 11CIP
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Old 10-01-2015, 02:07 PM   #9
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Yeah, we burn the hell out of diesel in our heavy equipment, somewhere around three and a half thousand gallons a week. Sometimes, when we're really cranking big, we'll do as much as five thousand gallons a week over multiple jobsites. We have fuel carts that hold five hundred gallons each and fuel boxes that mount on trucks that hold eighty gallons. We use a company called Watson over here and they'll roll up directly to the site in the afternoon to top off all the iron on site, so in the morning we can blow and go. Anyhow, one of our biggest problems is wet fuel and water getting past the separators. If I get a lazy operator that doesn't check his rig often enough, he can get water past the can and foul my injectors but good.

Also, when you use a company like Watson, they buy from a wholesaler and store their fuel in a large tank, then sell it in small lots to guys like me. So it isn't quite as fresh as it would be if I got it from somewhere like Chevron. So that means I'll have to clean the tank and tank baffles several times a year to get rid of algae and wax that builds u[p as well as sludge and tank turds that form in the bottoms of my equipment tanks.

All that said, the very last thing I need to fuck around with is water in my fuel, which is what will happen if ethanol is added to the diesel fuel, since it is a freaking water magnet.

The whole idea of putting alcohol in gasoline came from agribusiness, it had nothing whatsoever to do with saving the world from evil oil or pollution. It had to do with falling corn prices and the elimination of a corn subsidy back in the day, so forget about all of the bullshit surrounding this asinine mandate for ethanol. That shit needs to just go away.
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Old 10-01-2015, 07:00 PM   #10
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Originally Posted by ancona View Post:
The whole idea of putting alcohol in gasoline came from agribusiness, it had nothing whatsoever to do with saving the world from evil oil or pollution. It had to do with falling corn prices and the elimination of a corn subsidy back in the day, so forget about all of the bullshit surrounding this asinine mandate for ethanol. That shit needs to just go away.
The idea of gas-ahol (what they used to call gas alcohol mix) was an idea to help farmers have a steady year to year cash crop, but it was around long before that. They used to have "ethyl" gasoline that they used to help fight knocking in those old engines, and they also used, and still use either ethanol or methanol up here in cold weather to either unfreeze or keep your gas line from freezing, that's why I've always used the 10% ethanol stuff (it used to be about 10 cents cheaper too) so that my lines don't freeze in the winter. The name brand most people use is called "heet" when they add it to their tanks by hand, they make a diesel version too.

http://www.goldeagle.com/brands/heet-faqs
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Old 10-01-2015, 07:03 PM   #11
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Originally Posted by ancona View Post:
Diesel blended with ethanol? I don't think so. The fact that ethanol has such an incredible affinity with water would make that stupid to do right out of the gate, but the EU isn't known for their brilliance when promulgating their environmental rules now are they? Also, diesel should be right between 40 and 42 cetane rating, and adding alcohol would lower it, probably below the designers recommendations for operations. Unlike gasoline, diesel will spontaneously ignite under compression. It contains more of the volatiles than gasoline.
If it's bio-diesel they are blending that's usually either soy-bean based or stuff recovered from deep fryers. It won't hurt a diesel engine at all, in fact I know a lot of guys say it usually runs cleaner than the regular stuff, but if it's the stuff recovered from fryers, you will smell french fries everywhere you go.
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Old 10-02-2015, 04:21 AM   #12
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Heh
I could keep your fleet running for a few days Ancona if my tanks were full.

I worked out that the best way to stop the condensation getting in was to keep the tanks in a dry shed so the effect of temp cycling was reduced and the air taken in a bit drier.

We nearly lost a Concorde through brake failure years ago as they were storing the hydraulic fluid in oil drums outside and the temp changes were able to suck and blow past the seal which was sat in a puddle of water.
I now always ensure cans and drums are tilted enough to drain water away from the cap if they are left outside.

I can cope with water though as any would sit quietly on the bottom of my fuel tanks and I draw off with a pump from the top. Its the algae monster that I wish to avoid, having experienced it in rarely used machinery fuel tanks.

Thanks for the replies.
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