DrumBeat: September 21, 2008
Posted by Leanan on September 21, 2008 - 10:01am
I title this piece, "The Last Bailout," because if we are at peak, then financial bailouts will do little to help us. In the past when society had rising energy supplies with large energy profit ratios, these financial bailouts could avert disastrous consequences. They would allow the economy to regain its equilibrium and await the next sustained upturn. But, what if there is no next sustained upturn? If that turns out to be the case, then even if additional bailouts take place after today, they will all ultimately be lumped together into one, namely, the last bailout. And, the last bailout will of necessity fail to work as advertised.
With skyrocketing utility bills, focus shifts to safe heating
As cash-strapped Bay Staters scramble for cheap ways to heat their homes, the state fire marshal is warning that the national energy crisis could unleash a devastating wave of costly and potentially deadly fires this winter.“I think it will be very dangerous,” said state Fire Marshal Stephen D. Coan. “Historically and statistically we know that it only takes really that first cold night when those furnaces kick on, the first log is put into the fire, when the first space heater is plugged into the wall. From a fire standpoint, those are bad nights for us.”
Bomb a warning to Pakistan: End U.S. alliance
"The attack on the hotel is a message to the Pakistani leadership: End all cooperation with the Americans or pay the price," said Brian Glyn Williams, associate professor of Islamic history at the University of Massachusetts. "Both sides see Pakistan as a vital battlefield in their global struggle and clearly Pakistani civilians are paying the price for being in the middle of this struggle," he told The Associated Press.
Oil, Money and Politics on Display at Stevens Trial
The government's case against Sen. Ted Stevens, scheduled to begin with jury selection Monday in Washington D.C., could reveal details about politics in Alaska and connections between an oil company and Alaska's senior senator.
Panic Grips Tenn. During Gas Shortage
NASHVILLE -- Many Tennessee communities gripped by a gas shortage were in panic mode over the weekend, and bad news from AAA did not help to calm them.AAA said Saturday that supplies in the state may not return to normal until late next week, but until then, they said everyone needs to deal with the crisis in a reasonable manner.
The latest updated came a day after Gov. Phil Bredesen stated that the colonial pipeline that provides much of the Nashville area's supply was at 100 percent capacity.
AAA stated that the pipeline is still experiencing interruptions because of power problems caused by Hurricane Ike. It said it does not expect normal service to be restored until next Friday.
Bronson blames bloggers for fueling state gas frenzy
Bronson said the gas shortages were due to "public panic" that he blamed in large part on unnamed bloggers fueling the frenzy."A lot of it was people who actually believed a blog, when they see what's coming out over the blogs and it just got worse and worse as the day went on," said Bronson. "Even though all three of us were indicating there's no shortage of fuel, it didn't make a difference."
So bloggers were able to incite the public into a petrol panic while three of Florida's four statewide elected officials could do nothing to stop them? Yipes.
WITNESS: Speculation and sandwiches as OPEC burns night oil
arbara Lewis is deputy energy editor for Europe, Middle East and Africa for Reuters. She has worked at Reuters for eight years and has covered numerous OPEC meetings over the past decade. In the following story she describes the tensions and fervour of an 'ordinary' oil exporters' quota-setting meeting -- in Ramadan and with oil prices around $100 a barrel.
There's an Energy Crisis: But it's not the one you think
OIL PRICES are plummeting, and the government ought to do something about it.
Making most of hard black gold
power. Coal has historically played a crucial role as a source of energy worldwide, and has several important advantages over other fossil fuels.
Louisiana Oil and Gas Association: More drilling needed to face coming oil crunch
Oil is finite, meaning it depletes. Today, the world's crude oil depletion rate according to some experts is close to 10 percent. It's important to understand that Gawhar, the largest oil field in the world in Saudi Arabia, is in a decline rate of 8 perecent, and Cantarell, the second largest oilfield in the world belonging to Mexico, is in a 10 percent decline.Let's assume the current world crude oil production is at 86 million barrels per day. Using a very conservative decline rate of 7 percent, the world would have to discover a new 6 million barrels per day next year to stay even with current world supplies.
Let's also assume world oil demand growth is 2 percent. That would add approximately another 2 million barrels per day. The world will have to discover 8 million new barrels of oil next year to meet decline and growth. That is equivalent to discovering the total production of the United States and Mexico.
Who will lead by example on climate change?
Another sober warning that we are mice preparing for our own drowning is on my desk. The more I read it, the more I laughed as to what politician would dare pay attention. We might be the mice of climate change, but the pols are the rats on a sinking planet.The Center for Environment and Population, a consortium of university researchers and environmental advocacy groups, last week released a report on how the American lifestyle plays a direct part in climate change. Because of suburban sprawl and its obligatory lawns, malls, and roads, each American in effect takes up 20 percent more land than he or she did 20 years ago. Our world-leading use of household appliances is rising dramatically.
Then there is the nagging habit of humans wanting to live precisely where global warming will hit first. Fifty-three percent of Americans live within 50 miles of a coast, on only 17 percent of the nation's land. If we are not in pursuit of water, we head for the desert. Seven of the 10 fastest-growing cities in the United States are in arid Arizona, Nevada, or Colorado, and Nevada is our fastest-growing state.
"In response," the report said, "Americans must make strategic choices both in their individual lives and collectively as a nation - from the local community to national levels - in order to balance the increasing pressures of human activity and their climate change impacts."
This is the part that is almost a joke: Who will lead by the example of their own individual choices?
Climate emergency: birth of a new protest movement
In the room are a chemical engineer from a large mining/energy corporation, a solar energy engineer, a psychiatrist, a veterinarian, an artist and a construction worker. Also present are an ex-Labor Party activist, a Greens candidate in the 2007 election and a socialist student. Where do you find all these people, and more besides, in one room working for the one cause? At a meeting of Melbourne’s Climate Emergency Network (CEN).Australia is seeing the emergence of a new radical cause that is cutting across old political boundaries and bringing together people who would never before have crossed paths. For more than a decade, the environmental movement has been dominated by elite lobbying organisations on the one hand and dwindling groups of direct action protesters organising forest blockades on the other. Official green discussion alternated between pseudo-scientific “sceptics” saying there is nothing to worry about and safe pastel-green NGOs telling us that if we did our recycling (and made a donation) we had nothing to worry about.
Which is most technically feasible to scale? Coal? Carbon emissions…cap and trade…coal cleanup costs…coal is an unlikely source of electricity to nearly triple. And, coal has important uses in the manufacture of metals and metal products.Renewables? If only! But scaling up by a factor of 13 is a formidable challenge. Not in the next twenty years. Not even in the next 50 years.
Nuclear? The USA has 104 operating nuclear power plants. Scaling up by a factor of six would require 624 plants, or 520 new ones to replace crude oil totally. They cost about $4-5 billion each. For this, we would pay $2.34 trillion. We import 10 million barrels of crude every day. We send out of the USA $438 billion annually for purchased crude oil.
We’d pay off the nukes in five years and four months, and then we are ahead more than $1,430 per year for every citizen in America.
Fuel economy drive seen powering turbo boom
DETROIT (Reuters) - Underpowered and unprofitable, a generation of small cars from Detroit has sputtered in the marketplace."Among other pejorative terms, dealers have sometimes referred to subcompacts as beer cans -- meaning it's a bunch of metal and not much more," veteran auto investor and executive Jerry York told the Reuters Autos Summit in Detroit this week.
But as General Motors and Ford work to roll out revamped, fuel-efficient cars starting in 2010, they also are trying to strike a balance between the need for economy and the American craving for horsepower.
No quick resolution to food versus fuel debate
ST. LOUIS (Reuters) - The government mandate for a much more aggressive U.S. policy to produce crop-based fuels is less than a year old but it has spurred one of the biggest battles within the agricultural industry in decades.
EU biofuel panic threatens planet - Brazil envoy
BRUSSELS (Reuters) - Europe's heated debate over biofuels risks weakening one of the world's best tools to fight climate change and one of the developing world's best hopes for economic growth, Brazil's ambassador to the EU said on Friday. "What I fear is the debate over biofuels has taken on a very emotional character and we have somewhere got lost in this emotion," said Maria Celina de Azevedo Rodrigues."Once, biofuels were seen as the salvation, and all of a sudden they are the devil."
Beaverton boy lauded for solar cell invention (updated)
"In his project, 'A Highly-Efficient 3-Dimensional Nanotube Solar Cell for Visible and UV Light,' William invented a novel solar panel that enables light absorption from visible to ultraviolet light. He designed carbon nanotubes to overcome the barriers of electron movement, doubling the light-electricity conversion efficiency. William also developed a model for solar towers and a computer program to simulate and optimize the tower parameters. His optimized design provides 500 times more light absorption than commercially-available solar cells and nine times more than the cutting-edge, three dimensional solar cell."
How do we become less auto dependent?
With a peak oil conference in Sacramento this week and the 100th anniversary of the first mass-market automobile coming up, it's a perfect time to re-visit our relationship with that most ubiquitous icon of the American (and California) Dream: The Car....These days it's pretty well accepted that we can't all drive everywhere. California was home to some of the earliest suburban sprawl, so its metropolitan areas experienced early on what happens when everyone tries to drive everywhere: unending congestion (despite more and bigger highways), more sprawl and overall greater dependence on oil.
For years we've tried to limit sprawl and promote transit, bicycling and walking – first in the name of conservation and quality of life, more recently to fight global warming. Today peak oil (the looming high point of global oil production) and the end of cheap oil make it more urgent than ever to reduce our dependence on cars.
There's a problem, though. We're stuck with the landscape we've built over the past 60 years, much of which is literally uninhabitable without a car. Trying to make our communities less car-dependent simply by adding more buses, streetcars and light rail is like trying to make a bowl of chicken soup vegan simply by picking the chicken out. It's just not that simple: like the chicken broth in my chicken soup, car dependence is an inherent property of nearly every city, town and suburb in this country and especially so in car-loving California.
My View: For security, a West Coast oil reserve
Energy security is an essential component of California's economic stability. International conflicts, whether expressed through terrorism, insurgency or organized crime, threaten the supply of oil necessary for fueling our regional economy. The federal government should take action to mitigate the impact of disruptions to California's oil imports. It should expand the Strategic Petroleum Reserve to create a West Coast stockpile.
Saudi needs oil above $49 to avoid deficit; Qatar break-even $24: IMF
DUBAI: Saudi Arabia, the world’s largest oil exporter, will need crude prices to remain above $49 a barrel to avoid a fiscal deficit, a senior International Monetary Fund official has said.“If it goes below that level we would start seeing a fiscal account deficit,” Mohsin Khan, director of Middle East and central Asia at the IMF, told Dow Jones Newswires.
Oman facing major gas shortage
Even with the start of delayed gas imports to Oman in November, the sultanate is still short of gas supplies to meet rapidly growing demand, an Omani newspaper reported the oil minister as saying on Sunday.
Aramco-Dow petchem plant 'faces delays'
Saudi Aramco and US firm Dow Chemicals' giant Ras Tanura petrochemical faces delays as the sheer size of the project complicates design, a report said.
Group declares ceasefire in Nigeria's south
LAGOS, Nigeria - Nigeria's main militant group declared a ceasefire in the southern oil region on Sunday, ending the worst spate of militant attacks in years to hit Africa's oil giant.The Movement for the Emancipation of the Niger Delta said it was ceasing hostilities immediately after appeals from elders and politicians in the restive southern region.
The group said in an emailed statement that it would launch another spate of reprisal attacks in the event of another military raid on one of the group's base camps.
FACTBOX - Nigerian militant campaign hits oil production
(Reuters) - Militants in Nigeria's oil-producing Niger Delta began a unilateral ceasefire on Sunday after a week of the most intense attacks for years on the oil industry in Africa's top producer.Following are details on the facilities the main militant Movement for the Emancipation of the Niger Delta (MEND) claims to have attacked over the past week and what the operators have said.
How and Why the Republicans Will Win and a Police State Established
Matthew Simmons predicts by 2015 the world will, in the BEST case scenario, be pumping no more than 65 million barrels per day of crude. Since this is The Young Turkes I will just say Matthew Simmons is arguably the most deeply knowledgeable single person in the world on the actual state of the worlds oil fields, what their future production curves will be, the fields coming on line and the state of new and expected discoveries. Matthew Simmons is the founder and chairman of the worlds most successful energy investment bank (really REALLY smart) and has been intensively studying oil depletion and peak oil in particular for the last 8 years.By 2012, the last year of the next administrations term, the world's oil market will be several milllion barrels a day short of demand and that shortage accelerating over time. Keeping in mind the oil exporting nations, with rivers of wealth pouring into their economies (while the oil lasts) will be using ever more of their own production, which will decrease the oil available on the world market for the net importers much faster than the decrease in the total production figures.
Oil Rich Venezuela and Brazil Get Ready for War. But Against Who?
In recent years President Hugo Chávez has become Washington's ultimate Latin American nemesis, with the Venezuelan leader striving to bedevil the U.S. at every possible opportunity. While his rhetoric and flamboyant attitude might otherwise go unnoticed, Venezuela is an oil rich country and Chávez has used his "petro-dollars" to upgrade his nation's military, mostly through the purchase of Russian-weaponry, and has implemented a foreign policy that is breathtaking in its sweep and novelty.
Gas station owners just trying to survive
In response to talk about price-gouging by oil companies, I want to say a couple of things from a gasoline retailer's point of view.First, it should be pointed out the fuel that was already available here and bought at lower prices was streetpriced based on the reasonable expectation of a continuing supply. When it became clear Hurricane Ike was going to hit the Texas coast and the refineries were shutting down and no more continuing supply would be available, the value of those existing gallons significantly increased. Supply and demand.
Hurricane Gustav already had pinched the supply line, and with the refineries not producing, the pipeline not pumping, and the fact it would take seven to 10 days at best to get it all back up and running, we were looking at a limited supply of fuel. That, in turn, caused prices to rise, especially in light of the "panic" buying going on Friday, Sept. 12, the day the storm hit.
The end of the Canadian environmental movement?
So today the enviros have the election they have been waiting for, they have the platform they have been lobbying for and they have a leader who believes in it to his core.And yet, from the enviros, silence. It hurts ones ears to listen to the silence that has emanated from the environmental groups since the Green Shift was released, never mind during this campaign.
Permafrost May Not Thaw Even During Global Warming
One of the potential consequences of a warmer world, according to scientists who study such things, is the deep thawing of the permafrost. Thawing could release huge quantities of carbon into the atmosphere, as vegetation, bones and other organic material, long locked up in the deep freezer that is the permafrost, decompose.But a study published in Science suggests that the impact of warming on the permafrost may not be as bad as forecast. The evidence comes in the form of a wedge of ancient ice found at an old mining site in the Yukon in Canada.
Northeast states start carbon dioxide auction for future sustainability
The Regional Greenhouse Gas Initiative gets real on Thursday, when its first industry auction of carbon dioxide allowances will take place. It's the first mandatory carbon regulatory venture in the United States, and so of keen interest globally as well.
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Re: Permafrost May Not Thaw Even During Global Warming
So it is OK to dump 30 billion tons of CO2 into the atmosphere every year then. Recent research has revealed that subsea permafrost is becoming unstable off Russia's northern coast.
There is also plenty of permafrost melt in the sub-Arctic. With enough warming the clathrates will be destabilized as well. But a few frost wedges will survive. Really, if the permafrost melts down to one foot instead of four we are all going to be spared from global warming? "[M]odels of future melting need to be rethought". Current climate GCMs don't even include permafrost thaw (along with the associated CH4 release) and assume glacier and sea ice behaves like giant ice cubes (i.e. vastly overestimated persistence).
I wonder if Prof. Froese is getting funding from Alberta's fossil fuel industry. The tone of the article appears to be aimed at spreading FUD.
I think that's a little harsh.
That hardly sounds like "go ahead and spew CO2" to me.
Agreed.
I saw an experiment in the Harvard Research Forest in Massachusetts with two glass enclosures placed in the sunlight. One was filled with air, the other with carbon dioxide. There were thermometers in each. The temperature in the enclosure filed with carbon dioxide (CO2) was warmer than the other filled with air.
Thirty years ago I took some courses in geology. I learned that there were continental ice sheets on the North American continent with ice piled up from the Arctic as far south as Manhattan more than a mile thick. The glaciers pushed large boulders, cobbles, sand, et. in front of them and where they stopped and began to retreat huge piles of earth were left behind. Cape Cod was formed by a glacier. The Susquehana River was filled with glacial meltwater during the global warming episode that began about 11,000 B.P. The volumes of water in the Susquehanna were as great as to form the Chesapeake Bay. The climate was so cold in the ice age that there was rainfall in the northern Sahara desert, a lake in the Sinai, and glaciers on the mountains of Lebanon. Much of the ground water in the Sinai and Negev is "fossil" water left over from the Ice Age era.
The global warming "experts" were quite angry with anyone who even mentioned there might be other causes for global warming that are not carbon dioxide related. People who suggested there might be other factors for climate change were treated like heretics.
What happened to cause an episode of global warming beginning about 11,000 years ago? I do not believe it was related to burning coal or driving automobiles. What happens if you cannot change the climate by riding a bike?
This is pure bull crap if it ever existed. Who are these "experts"? We all know there have been periods of climate change in the past. No one needs to take "some courses in geology" to learn that. And the warming 11,000 years ago was merely a return to normal, it was not a period of global warming such as the ones we experienced in the Jurassic and Cretaceous.
The debate Rainsong, is whether this period of global warming is man made or not. We, those of us who believe this warming period is basically anthropocentric, are not the blooming idiots you seem to think we are. We all know that past periods of intense climate change were not man made since man did not exist during over 99% of those periods.
There have also been periods of mass extinction in the past. None of them were man made because humans did not exist during those extinctions. However the mass extinction we are experiencing right now is definitely man made. And that is likely the case for this period of global warming also.
A apologize for this rant but such posts as this really piss me off.
Ron Patterson
Did you study palynology, dendrochronology, C-14 dating, or archaeology? Did you think that between 11,000 b.p. and 7,000 b.p. the world returned to normal? Have you done enough reading to know what normal is? At one point basalt was spewing out of the earth over thousands of miles of what is now the Indian subcontinent. Was that normal? Another time calcareous algae were considered higher life forms, it would not be nice to return to those conditions. About 5,000 b.p. in the Early Bronze age there were communities in the Negev and Sinai that were gone by the late Middle Bronze age due to the continuing onset of aridity associated with a global warming event, not related to a film by Al Gore. The expansion of the Sahara into the Sahel has continued since 4,000 b.p. There were layers of earth, strata that contained tiny pollen grains to give archaeologists a clue as to past climate conditions. These along with other vegetable remains have been C-14 dated.
You may be pissed off indeed. Ignorance is a great convenience, It does not have to study at all. In Pakistan the birth rate is double the birth rate in the United States and the United States is suffering urban sprawl at a fast pace. Man's encroachment on the forests, plains, deserts, and swamps has been fueled by man's desire to prosper and multiply. There was the invention of nitrogen fertilizer, Pasteur's smallpox vaccine, many wonderful things to alleviate suffering until some species cannot make it due to people taking over their turf.
If you can convince people to give up all hydrocarbon use, and you cannot, you may yet have problems. The sea level has been rising a long, long time. Did you ever see the outline of the continental shelf? I was told it was once dry land. Did they ever tell you about the land bridge from Siberia to Alaska, or did you think they were kidding you?
The Deccan Traps Basalt Flows were 66 million years ago! They had nothing with the earth's temperature returning to normal 11,000 years ago. You try to sound like an expert on just about everything but your ignorance is glaring. The debate is about the current global warming and whether or not it is being caused by human actions. That Rainsong, is what we are talking about. Either stick to the subject or crawl back under your bridge.
Ron Patterson
Either stick to the subject or crawl back under your bridge.
The debate part is good. This part is not.
Eruptions did emit carbon dioxide. Volcanoes also spewed ash and sulphuric compounds that formed particles to block out the sun for a time. 65 million years ago an asteroid impacted north of the Yucatan peninsula in the GOM. The earth's crust cracked in places like an egg shell. Cantarell is somehow associated with the structures formed in this event.
There was a study of pollen grains done at Tel Beersheva, ISR (Beersheeba). By noting what vegetation was there in the Late Bronze Age compared to what is there now. The vegetation zone had moved about 15 kilometers to the north since then (1500-1270 BC). There were cores taken from a lake sediments in Anatolia to show the changing climatic conditions and to confirm global warming. Archaeologists were supposed to gain expertise in identifying strata and finding ways to date the layers. Most archaeology is concerned with historical times from the Bronze Age onward, a few were interested in the earlier Neolithic and Paleolithic layers.
Sahara cattle herding 5000 BP (Early Bronze Age):
http://www.springerlink.com/content/j363177413u53687/
Since then cattle herding has disappeared from the Egyptian Sahara (from other readings). Archaeologists found stone grinders far out in the desert that receives almost no rain now. There was also evidence of plowing. Barley can tolerate low rain fall conditions, but needed some rain. With global warming the Atlantic storm patterns shifted to the north.
What happened to sea levels after a mile and a half thick ice sheet started to melt off of Maine and points north about 11,000 years ago? I have not entered into glacial studies in recent years, yet retained some information from lectures and New England field work. What species were able to survive? Not the mastadon or saber tooth tiger; although they occasionally found frozen mastadons in Siberia and marketed the tusks. Global warming cannot be narrowed down to a single factor of the amount of CO2 alone. Man's activities also cause ash to be released in the air, and dust from overgrazing and disturbances of arid areas. These particles might have a cooling effect. Would one expect more water vapor in the air with warming? Would that block out the sun with cloud cover? Evidently not enough. Some blame major climate change on an eccentric orbital path, others on the irregularity of the sun. The sun can not be proven to be constant.
A lecture by a physicist at the Smithsonian about the thinning Arctic Ice sheets in the 90's revealed that there were times of no polar ice coverage. I am not an expert on the subject.
Rainsong, we are all very aware that there have been ice ages, as well as periods of intense global warming in the distant past. These were not man made because humans did not exist during those periods. And the last event, when the last ice age receded, the human population was too tiny to cause anything.
We are all very aware of these facts!
The debate is about this period of global warming! Is this period of global warming being caused, or at least exacerbated, by humans burning massive amounts of fossil fuels and thereby dumping massive amounts of CO2 into the atmosphere. So please stop telling us about periods of global warming and ice ages of the past. We are not children, we all know about these past dramatic climate events.
Stick to the subject. Is this period of global warming cause primarily by human activity?
Ron Patterson
Rainsong, I agree with much of what you wrote, although I think you need to get your dates correct. As I understand it, the Last Glacial Maximum was around 20,000 years BP, not 11,000. The glacial melt was well underway by 16,000 BP or so, as the sea level had already begun to rise by then. The Younger Dryas period stopped the warming trend for a while, a period which ended about 11,000 BP. Sorry, I don't have more exact dates from memory.
It appears that the large mega fauna of North America was decimated by the Indians after they (or earlier humans) moved in from Asia. There is evidence that mammoths survived on Wrangle Island as recently as 4,000 BP, well after the Ice Age climate was gone. There's also evidence that farming practices may have changed the local climate and may be doing so now in areas such as Northeast Brazil. One comment I recall is a claim that the precipitation which falls on the Andes has already fallen as rain three times the Amazon as the moisture travels from the Mid Atlantic across South America to the mountains. The rain is returned to the air by the forests and cutting the forests reduces rainfall downwind. Something similar may have happened near Egypt and the Sahara, cutting the rain fall downwind and leaving a desert behind, IMHO.
But, as Darwinian notes, the AGW problem is the next few centuries, not 2,000 or 11,000 years BP. We need to understand the past to improve our forward vision into the future.
E. Swanson
According to NASA scientists over the past 20,000 years or so the sea level has risen 120 feet. Part of the continental shelf was once dry land.
http://www.giss.nasa.gov/research/briefs/gornitz_09/
If you divide 120/20,000 you get about .01. Thus in a hundred years the ocean rose a foot. Parts of the sea level rise curve was very steep. I believe this was the period when most of the continental ice melted. During this period there was more than a foot of sea level rise in a hundred years. Now there is ice in Greenland, Antarctica and some glacial remnants in mountain ranges closer to the poles. Not as much ice as there was 20,000 years ago.
The studies of the global climate extended to Europe and North America and were not limited to the Sahara and temperate zones near the edge of the Negev. There have been symposiums and papers. The global warming hysteria seems to have bypassed this field of science. Mammoth corpsess yet melted out of the Siberian tundra. If no animal was made extinct by this period of warming, there is not much credence in the theory that increased carbon dioxide is extincting animals. It may be loss of habitat, hunting, fishing, etc. You might have problems keeping polar bears alive. There are no saber tooth tigers left. Perhaps they were unable to find food. Perhaps they were shot with bows and arrows while the grizzly bear and mountain lion survived. The mammoth is gone, but the caribou remains. The caribou may have been faster on its feet to run from hunters.
For some reason I previously picked up on the 11,000 BP number for ice melt as that was closer to when mankind may have begun the agricultural revolution and studies I read began at that date and later.
The ocean levels have been rising and not stopped rising long before the industrial revolution and the invention of the coal fired steam engine.
Will CO2 levels exacerbate the situation? Probably. If CO2 levels had remained constant the ice melt would continue according to extrapolation of the NASA sea level curve.
It is some chicken little pseudoclimatologist that came up with the theory that carbon dioxide is the only factor to blame for global warming.
Aren't you tired of making gargantuan spurious correlations, conflating issues and just plain misrepresenting the science(lying)?
Who has ever said CO2 is killing animals? Propaganda or a lie?
Jeers
If you understand (believe) in what you saw here, is there then anything to add ?
If a doctor tells you can die from that cholera you've contracted, would your reply then be: "yes doctor, but frankly I believe I will die from pest" ...
I second Darwinians comment.
Rainsong , we've been there, done that.These sort of links should be outdebated by now, at least here at TOD(!)
To Ron and Paal both: As far as i'm aware the science behind AGW is now 90% certain. Given this figure it is probably worth doing something to limit our C02 production. However given the current downfall of the financial and energy world, as I have droned on time and time again, we will dig up and burn everything that looks remotely black in the quest to keep civilisation going! Coal is making a BIG comeback anf no amount of green lobby appears to be having any effect in curtailing fossil fuel production.
The only scenario that I can see where we get a downward slope in c02 is if the real doomers on this site are correct and humanity decends into chaos, at which point we all know there isn't going to be much of an energy infrastructure left! That said if we descend that far then we are likely dragging our sorry asses through a nuclear winter. As a non doomer though I don't think it will vcome to that!
So my point? Nothing is going to be done about C02. Period. So in my mind regardless of whether AGW is correct or not, the game is lost anyway.
Marco
I have to agree with your conclusion Marco.
All combustible substances will be burnt as fast as they (not me) are able to make machinery to burn them with. Climate-journalism in my country went completely mute at lest 1/2 year ago, Norway that is.
Unless GreenPeace , WWF and such organizations turn into political parties - real political parties, there will be NO hope concerning global warning mitigations. Unless PeakOil see to it of course.
The WWF... World Wresling Federation...? Political party...?
"I also believe that government has no business telling us how we should live our lives. I think our lifestyle choices should be left up to us. What we do in our private lives is none of the government's business. That position rules out the Republican Party for me." -Jesse Ventura
World Wildlife Fund. The World Wrestling Federation had to give up this acronym a number of years ago. I believed it has changed to WWE.
Marco, I believe the current warming trend is almost entirely man made. However I never said that I thought there was anything we could do to reverse the trend. In fact, I think there is very little we can do to reverse the trend and nothing we will do to revers the trend.
It takes about 800 years for nature to remove the carbon dioxide from the atmosphere so it really does not matter how fast we burn the oil or coal. The fact is that we will eventually we burn it all, or all that we can possibly extract anyway.
If you had followed my posts on this list for the past two years, and for the last eight years on other lists, you would know that I have no faith in humanity to voluntary reduce the trend of overshoot of our environment and resources. By and large humans believe what they desire to believe and deny what they do not wish to believe. They are not convinced by facts or logical argument. Only actual events influence most people's thinking. This means that we will not do anything to stop the coming disaster. Only the actual collapse will convince people of the true danger and by then it will be way too late.
In fact, it is already way too late.
Ron Patterson
I knew this Ron, but I was just including the statement as my general take on the whole situation. The doomer bit was for you :-0 !!
Marco.
Isn't it time to stop posting this sort of thing?
Do we all agree the world is going to hell in a handbasket, and it is all because of an intractable "human nature" that will never allow us to "do anything?"
If so, then TOD has no further purpose.
However, I think there is life beyond "collapse". My notion of the purpose of TOD is to provide information about energy sources-- mostly oil, but the mandate has broadened, and ways to use them.
Essentially religious topics, such as "the end is near", or debates about "human nature" are best left to other blogs, in my opinion.
I'm going to be starting a community local group with all of the knowledge I've gained here. I just don't feel it's quite time yet. We may think so, but I know plenty of people who think peak oil and energy crisis's just aren't improtant just now. like Ron said, it takes a real thing to happen to them to make them stand up and take notice eg. severe prolonged fuel shortages which has not happened in the UK yet.
Other thing to bear in mind is we may turn the doomers to the good side of the force :-)
Marco.
NO! Because there is a very important point I, and others with like opinions, are trying to get across.
Nothing we can do? Whoever made such a stupid statement as that? True there is nothing you can do to save the world, but there is plenty you can do to enhance your chances of being among the survivors. We, here at TOD, have posted hundreds of threads on permaculture and related subjects.
Pay attention Never and you will not likely make such a silly mistake as that again. TOD has a very important purpose. We keep up with the latest news leading to peak oil and the eventual decline and the coming collapse of our economy. We are preparing ourselves for that day.
So please Never, stop trying to dictate what others may or may not post.
Ron Patterson
Sorry, I don't believe I'm trying to dictate. Just making helpful suggestions.
We all agree that Leanan is the dictator.
If Leanan could be installed as world dictator overnight, I'd wake up tomorrow feeling a lot better ;-)
Whoa. I think you're on to something. Here's a proposed revision:
(a) Authority to Purchase.--Leanan is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by Leanan, mortgage-related assets from any financial institution having its headquarters in the United States. Or any other darn thing. Anywhere. Crayon on soiled napkin works; we're going to cherry pick from our buddies anyway.
(b) Leanan is authorized to take such actions as Leanan deems necessary to carry out the authorities in this Act, including, without limitation: .. ummm.. well, no hard limits, really.
See where this is going? Heck, why bother with more details? We'll just start with these two provisions and L can make it up ex post facto. We don't need no stinkin' rules? Don't you trust her?
All in favor say, "Aye". All opposed, "Nay".
P.S. Leanan, no dis-ing intended. You rock! Especially if you actually get these powers. ;)
P.P.S. You see, I have this mortgage and....
Hey, we're offering you a democracy with the rating system. But people don't seem to like it, so I can only assume you prefer a dictatorship. ;-)
More like a dumbo-ocracy, as many have already explained! Mind you, DaveMart has made the sound point that it serves well for those who are not capable of putting forward any reasoned arguments or evidence yet still consider their opinion better than that of others. If the rating system reduces the amount of posting by such people, then even I have to concede it may serve some useful purpose (albeit not as intended)-!
In truth Ron, the persuasive person that you are, I think people are disheartened by your rhetoric. For myself I have weighed the evidence and (as we've discussed a few times) don't think society is going to go go quite as pear shaped as you envisage!
There is always hope, and although I stand accused of sticking my head in the sand, I can assure you we know of the possible outcomes as well as you do. Many of us, I believe, choose to give those outcomes differing weight.
AT the risk of sounding patronising - you could be wrong!
Marco.
I could be wrong about what? I have been wrong many times in the past and no doubt hold a few wrong opinions right now. But one thing I am not wrong about is the fact that Homo sapiens are currently deep into overshoot. If I am correct in that, and I deeply believe that I am, then it is already way too late to do anything to save the human race from a deep die-off.
Marco, I have thrashed this straw for over forty years. I don't mean peak oil straw but overshoot straw. In the mid 60s I was trying to convince people that the world was overpopulated and headed for disaster if nothing was done. I was too dumb in those days however to realize that nothing could be done, and of course nothing was done.
Here are the sad facts Marco. If the save the world crowd is successful, and a die-off disaster is averted, then matters can only get worse. The world's fisheries will be depleted even further, the rainforest will almost completely disappear, more rivers will dry up, more lakes will dry up or turn into cesspools, more species will go extinct, more topsoil will wash away and a thousand other problems that our massive population has caused.....will only get worse.
Then it must happen! Sooner or later everything will collapse. And if it happens fifty years from now when the population is between 9 and 10 billion, then the die-off will just be all the worse. Billions more will suffer and die than if it happened now.
But you can still disagree with me Marco. But if you do then you must believe that the world is not in overshoot! Yes it is possible that you agree with Bjorn Lomborg and the late Julian Simon, that there are no population problems or environmental problems that are not right now being solved.
It behooves those who think the world is not in overshoot to explain themselves. Lomborg and Simon did it with books. I have read them both and they are both real hoots. A quote:
But I am always open to other opinions.
Ron Patterson
Ron: Your silence on the Paulson looting of the country is deafening-this is usually where you jump in and label everyone a consiracy nut.
Brian, the country is being looted but it is not Paulson's doing. Most others, if in his position, would probably do the same thing. And to qualify for it to be looting on Paulson's part he would have to profit from the action. I don't see him gaining personally form it.
It all started with those low interest rates the fed set to try to prop up the economy. Then there was the almost total lack of regulation of the banking system. And there were many other causes but there was no conspiracy on the part of anyone. All this stupidity is absolutely out in the open so where is the conspiracy? The only ones crying conspiracy are a few wingnuts on the internet. No one pays any attention to them so why should I comment?
In order to be a conspiracy all this would have to have been planned, covertly, in advance. Who would profit? Everyone is a loser in this situation and the biggest loser may be the Republican Administration under who's watch it happened.
Massive inflation will probably be one result of all this. (Huge deficit spending usually results in inflation.) And the losers will be everyone.
Ron Patterson
Perhaps Marx's class interest is a more relevant lens to look at what is happening than conspiracy theory.
However, although maybe Paulson will not directly profit from his actions, if say, a policy of nationalising the banks and heavily taxing unearned income by the participants in the run-up to this fiasco were followed, on the grounds that vast bonuses have been drawn for wrecking substantial sections of the economy, he would be around $500million poorer, I believe.
If you ask a banker, you get a banker's answer. So he thinks it perfectly reasonable that people should loose their houses as they have not been prudent, but not that the leaders of the industry should be pursued for gross negligence or the banks allowed to fail as that would constitute 'systemic risk'.
If the banks which had written dodgy loans and their creditors were allowed to fold, and as much money as possible reclaimed from their executives and regulators who had failed, rather than throwing good money after bad we could found new banks which would be handsomely capitalised with teh money he is trying to earmark to bail them out.
Why do you complain about loosing the house if you can not pay the loan? Over here you are stuck with the rest of the debt AFTER loosing your home. US mortgages are suger coated candy for children compared to Swedish ones. On the other hand it makes people more carefull and the real estate bubbles and their losses tend to mostly be in commercial and urban areas since people try realy hard to pay since they can loose their home and still be indebted.
I have not lost a house and do not live in the States.
The idea of a non-recourse mortgage seems to me deeply foolish, but of course it is part of the ponzi pyramid-selling scheme where everyone was supposed to get rich.
The people who fell for it are suffering now, and bear a degree of culpability, but nothing like as much as those who set up the schemes and profited from them, often 'earning' bonuses of millions of dollars, and getting out before the rotten edifice crashed.
In the UK after the war estates were taxed massively, and it would be a simple thing to impose extraordinary taxes on those who have been involved in the running of the financial services industry to partly compensate the taxpayer for the money which must be found.
They richly deserve to join the homeless, as do the regulators.
But of course they are well-connected, so the poor who struggled for a place on the bottom of the ladder are the ones who are suffering, and get the vilification.
non recourse loans, but with homeowner paid for private mortgage insurance. so one has to wonder, is the latest $700 billion for the purpose of bailing out mortgage companies or insurance companies or merely for the purpose of looting the treasury. i think the latter.
Davemart,
Paulsen's already profitted when he was in charge of Goldmund-Sachs. I read somewhere his fortune is somewhere in the region of 250 dollars. I doubt this means he's above profitting. Also he's got to think maintaining the value of his personal portfolio. The guy is turning into a kind of financial dictator.
Whoops! That should of course have read 250 million dollars! That must have been wishful tinking!
$500 million, I heard.
Presumably more shortly if he becomes Czar of the American economy.
Maybe I've been reading too much Derrick Jensen lately but I am becoming convinced that high altitude nuclear explosions are the
bestleast worst thing that could happen.Marco, I totally agree with your position.
There is a group of "doomster fundamentalists" on this site who energetically attack any position that differs from theirs. The essence of discussion and debate is listening to what other people have to say and then stating your own insights in a clear and respectful manner.
WRT climate change:
I spent 7 years (1985-1992) working with climate scientists forecasting northern ice conditions. Modeling climate change is probably one of the most complicated scientific endeavors that humans have ever attempted. Real scientists use the most data they can get, present their ideas in as many forums as they can (specifically to people who disagree with them), and then they publish very tentative conclusions. The idea that you *know* something is going to happen with certainty is the province of religion, not of science.
Someone characterized our current situation as:
"We are performing a science experiment and we are in the test tube".
So, we do have a responsibility to reduce GHG emissions *just in case*.
Personally, here is what I do:
Ranting and hand-waving aren't going to solve any problems. I am more interested in finding real solutions that in theatrics.
As soon as a debate is phrased in terms of 'denialists' and so on, it has ceased to be a scientific debate and has become a merely political one, as the language and structure of scientific thought is debased by their employ.
It is also a debate that I am not really interested in, as there are only three results possible:
Anthropogenic climate change is not occurring - so no action is needed.
Anthropogenic climate change is occurring - and it is happening at such a cataclysmic rate that in the real world nothing can be done about it over the needed time scales.
Anthropogenic climate change is occurring and if we moderate our fossil fuel burning, or perhaps run out of them, then the effects can be minimised.
Since my own opinions embrace using every possible way of reducing fossil fuel burn, no change is required regardless of whether it is or is not occurring, and regardless of what I think of it, so further thought seems not productive.
It amazes me that many who are most vigorous in their support of the hypothesis of anthropogenic global warming are firmly against nuclear power, and since the consequences of GW would be so severe their position makes no conceivable sense to me.
The subject would also appear to be sufficiently complex and technical that most of us who are unqualified and have not deeply studied the subject would not think it sensible to be too absolute in our judgements.
This is not to say that laymen are not entitled to an opinion, and indeed it is unavoidable as a citizen to form judgements on important issues where there are issues of public policy to be decided, but perhaps we need to remind ourselves from time to time that we are indeed laymen.
In the same way we will have an opinion on monetary policy, but would be fully aware that we would not be able to run it as we don't know enough.
Absolutely false assertion, and I am very much against such things as creationism, etc. But to claim all science is built purely on scientific method is a huge distortion.
There are many examples of such throughout history.
Cheers
Oh, don't get me wrong. I don't personally believe there is any chance of pulling back from overshoot. And I certainly am not into "dictating" what anyone posts here, though I might feel just as entitled to express my opinion as anyone else. Nevertheless, gloom is a cheap shot. What we need, IMHO, is a coherent story-- one that doesn't read like Walt Disney-- that leads out of the wilderness.
No one except the staff seem to pay for the privilege of posting, and unless someone is counting up greenies, there doesn't seem to be a coherent rating system, so I guess I'll just go on outgassing like everyone else here until I am arbitrarily thrown out.
If you really want to see a well-documented vision of the future, read Mike Davis' Planet of Slums. Combine the reality of a whole world of human slums, and the Paulson-Bernanke command economy, you can begin to see how overshoot can fairly easily be controlled. Any number of terrible fates can befall those concentrations of human misery.
But that isn't what I personally believe the Oil Drum was established to speculate or debate about.
So far, the religious models are more compelling -- and I had greater hopes for Science. Free will seems like such a good idea.
You GO! TOD. Let's put Science back in the running.
I am sure it is physically and technically possible but extremely hard to get all the needed change and investments going.
I recommend Planet of Slums as well...interesting (and depressing) stuff.
Has anyone noticed the garbage-isation of peak oil subject, too much redundant information to poorly structured.
When the government want to forget about something they gather a committee, when people feel the need to do something about something, they can do nothing about, they make a blog or a forum !
But the truth plain bold truth is that is unbelievably hard to walk against the current and do something not even mention to live an alternate sustainable life you risk been mocked at just for fun, at least for now !
Well, Karl Rove would call that a "success". It's called marginalization and he is/was very good at it.
You have in us marginalization of peak oil, but in the rest of the world oblivion.
Yours,
yiedyie
Climate is incredibly complex, to be sure. But there is a lot of scientific agreement that CO2 levels will affect climate if they keep on climbing. We know there is a threshold for sure: 100% CO2 means a very hot planet.
There's perhaps a little less agreement that anthropomorphic GHG's have already affected climate - in a scientific and measurable way - and the exact "point of no return where" feedback loops overwhelm countervailing cooling pressures.
Yes, if the sun expands we will all be burned to a crisp. But there's no good evidence of current solar fluctuations that can't be challenged on sound scientific grounds. The very acknowledgement of GW acknowledges a level of risk.
As you point out, the geological record supports extreme and rapid climate oscillations, swings that could even occur within a single human lifespan. In other words, if the AGHG theory is correct, this is very serious business.
On the other hand, there is no consensus at all on the central thesis of anti-GHG "junk science" advocates: That effective GHG policies will wreck the economy, even that they may be intended to do so.
Perhaps more unnerving, the reduced level of consensus on transformation thresholds means less support for firm targets and policies. We genuinely don't know how much we must reduce to provide for a margin of safety. In this way, political entropy and scientific entropy are related.
Serious GHG reductions and related policy measures cost money and perhaps votes. In Canada, these issues are driving the current election. The right wing has a simple message: Carbon taxes are bad. With the centre split five ways and the left split four ways, they may well win a majority.
This will put Canada in its own category, the planet's only developed country that demands developing country status as to GHG. We can proudly add "soaker of oilsand" to drawer of water and hewer of wood on our global resume.
Unlike most anti-GHG rants, the GHG thesis is not cant or religion, it is proper, disprovable science. The Far Right uses all the usual tools of their electoral trade: Claims of bias, ad hominem attacks, false data, sampling fallacies, howls of victimization to pursue the BAU growth agenda.
On the other hand, the questions raised by this post are legitimate and measured. A lot of people need to ride a lot of bicycles (not all at once, thank heavens) to make a difference and that difference is hard to quantify.
The point on GHG is that there is a cost at the margin for burning fossil fuels that is being borne by the bike riders and, for that matter, future generations. There is no consensus at all on this cost. It is hoped nascent markets for CO2 will be an exercise in price discovery. Maybe...
On the other hand, Canadian voters may yet choose to lead the world further away from post-carbon pathways, toward a future where promises of unlimited wealth and power are realized - at least as far as elected politicians are concerned.
Yes, this is the cornucopian fallacy, the repeal of scarcity, one of the basic laws of economics, in favour of idealism. Certain evidence of ideology driving policy.
Here's a topical example: Mortgages on properties you can't possibly afford, uniquely supported by the growth in value of the property, not your own productivity. GHG in growing GHG economies is one area where "risk may not end up being repriced", a phrase you may have heard during the credit crisis.
This year the Far Right has taken off its military uniform, dressed itself up as moderate, promising good government and more regulation. In Canada, due in large measure to a minority government, we already have that. The campaign consists of little more than scenes of our PM patting the family dog while scaremongering about carbon taxes.
Will voters be deceived RW's phony do si do to the centre? They have an agenda worthy of Gordon Gecko (the antihero of the film Wall Street): BAU and plutocracy.
Greed is good, polluting pays and, ultimately, political power comes from the barrel of a gun. Funny how totalitarians join hands on the underbelly of crisis. I wonder just what promises the Right will toss as soon as it's elected?
Man made global warming or not, won't know till it's too late,
but I heard David Suzuki say : If the earth was the size of a basketball, the atmosphere depth < than an onion skin layer.
I think what he is saying is quite reasonable. The time it takes for a step change in surface temperature to penetrate to a given depth goes as the square of the depth. So in a meaningful time frame (say a couple of hundred years), we only have to worry about the top couple of meters. This doesn't mean we should greenlight fossil fuel consumption, only that the most catastrophic scenarios floating around today are completely off base. Similar things apply to sea level rise. It is a serious problem, but it won't be twenty meters in a couple of decades, i.e. there is no hurry to evacuate to land above say fifty feet.
My interest is shorter term. There are reports from Alaska and Siberia that melting permafrost is causing infrastructure problems. Two meters of melt will be disastrous for roads, but for other stuff...how deep are the pipeline supports?
Gazprom's pipeline
Flowing with Questions about the Trans-Alaska Pipeline
And Pipeline Designs to Protect Permafrost
Well, that's not terribly encouraging. The refrigeration system will only work if the air is cold.
Even in a globally warmed world, there will still be many days of -30C or colder. The main thing is that such a system artificially controls the effective thermal insulation of the ground, allowing normal levels when it is warm, and high heat transfer when it is cold. I once visited an "ice cave" in New Mexico, basically a deep lava tube which collects cold air (because it is heavier and sinks into the cave). In any case in a climate that is probably twenty degrees warmer than where the pipeline is, it is interesting to have a small amount of year around ice.
OTOH, some ice caves are disappearing.
I know we have focused much on the financial events going on and this is not specifically a financial site, however, finance does fall under the umbrella of "Discussions of Energy and Our Future" and at this point in time, trying to decipher what is really going on geologically is nearly impossible.
This latest move by Paulson appears to specifically try to convince foreign holders of American debt, that they can trust us and be confident that we have a "plan" to fix things. At this point, it is merely "jaw-boning" to try to get the world to buy into the "plan" to restore confidence. Expect much more of this rhetoric today.
So, I am going to continue posting updates when I see them.
Paulson says foreign banks can use U.S. rescue plan
MSNBC had this headline:
Treasury Secretary Paulson says credit markets remain frozen
My guess, from Paulson's comments this morning, is that there will trickles of comments from Bush, Paulson, and Bernanke about how horrible things will be if their "plan" is not pushed through Congress and pushed through fast and unchanged. These are the moments that Congress should do EXACTLY the opposite. These are the moments where the powers of a government are blindly usurped. These are the moments where we find those with an ounce of courage and backbone.
Is there anyone left in the House, Senate, Judicial, or even our military that see this for what it could be? Is there anyone willing to convince the people of this country that they are working in our best interest, for us?
I am waiting and hoping.
I'm a little more hopeful than I was on Friday. There has been more criticism of The Big Bailout than I expected.
But I fear it's probably unreasonable to expect politicians to be sensible right before an election.
Still, I did contact my congress critters to air my views. I usually don't do that. The last time I did it, it was to tell them that invading Iraq was a terrible idea.
They went ahead anyway, and I expect they'll go ahead this time, too.
Ya, it's difficult not to be apathetic about it all. I think the best individuals can hope for these days is to effect changes at a more local level. Anyways, I still hold my ideals out there and hope for it.
I'm also contacting my senators and representatives today for the first time in a long time and I would hope that TOD folks who haven't done this in a while would consider doing so do so now. This is not a time to sit idly by. We all know what happened last time the nation was afraid and gave the current administration carte blanche to fix things.
This bailout has the whole look and feel of the Iraq invasion..and the passing of the patriot act after 9/11. I anticipate the bailout to pass into law and the outrage to follow by next tax season.
The elites in a society are there because they have been preparing their whole lives (by attending the best schools, competing for high paying jobs with a lot of complexity power and influence embedded in them, working at high levels for Federal Govt, etc) for a possible disaster which threatens their way of life. Peak oil qualifies as such a disaster. So they will use the power they have to maintain their advantages for as long as they can. And by the way I think some of them get little joy out of this. They are doing it out of some idea that their children will benefit from this by being able to continue to attend the best schools. The idea is that you better stick it to someone else before he/she sticks it to you. Dog-eat-dog world and all.
People will really fight to retain their position in the elites--the people who don't produce anything but direct manage and control the rest. Rulers and the ruling class never produce anything with their hands, they are managers. It is a dreadful and unspeakable descent in social class to go from managing elite to producer and one which the ruling elite (it broadly includes the professional class I guess) wants never to see visited upon their children, especially. The "best" schools are in big cities, with all the other resources like libraries and hospitals, etc. And that is not where food is grown, nor where there are things being made. So you have to funnel the resources in to the cities via bailouts to banks or these elites will have to capitulate, one by one, and leave in droves.They are fighting to stay where they are, firmly in control.
It is a tough fight, sure, but it will probably get a lot tougher as the energy profile continues to change unfavorably. It is a question of time. The current elites would like it to be a looooong time before their grip on power fails. And they probably hope to establish a favorable position for the future at the same time.
I very much doubt this. The "elites" are "wealthy" now because in a decadent society the advantage goes to those who have the parasitic qualities and skills that prosper (in the short term) in an institutionalised and impersonalised environment.
But they have vanishingly little by way of genuine non-parasitic/authoritiarian talents. Such as knowing how to make and mend things. Or even how to feed themselves in absence of a fat salary. And adapt to a drastically changed world. The stupendous incompetence of these "elites" is all too clear if you care to look. They are generally not in the remotest prepared for the coming what we might call Kunstlerisation. It is mostly those "elites" who are going to have the hardest crash!
RE the bailout.
I've often said that the difference between the Democrats & Republicans is that the Republicans want to rape and pillage the earth and make sure all their rich cronies get the biggest share (if not all); while the Democrats want to rape and pillage the earth and spread a little more of the resulting wealth around.
In this bailout, you see the same thing happening. The Republicans are most concerned about the finance 'industry' losing out. The Democrats want to save the finance industry but also throw a few crumbs to the poor commoner who has been victimized.
Would you like the Fed to behave like it did in 1929-32, when it just sat on it's hands while the financial system and the ecomomy collapsed. If there had been a big bailout then the depression may have been avoided.
Actually, Jerry McManus pointed out that we are doing the same thing they did back then. He quotes from a book written by someone who lived through those times:
The good news is, the runs on the banks didn't start until several years later.
These two PIMCO executives also believe that Greenspan, Bernanke and Paulson made (and I would add continue to make) miguided policy decisions based on conventional wisdom about the Great Depression that is mistaken:
Wow. I thought Bernanke was supposed to be an expert on the Great Depression.
I was thinking that too. Could Bernanke's "expertise" come closer to being pseudo-science? I mean, eveything he says or does screams "spend more," "borrow more" or "bailout a financial institution." The corollary of this of course is "Debt is not important." Those four elements seem to pretty much sum up his entire economic philosophy.
And, as William Manchester noted whilst talking about the Renaissance leaders from the early 16th-century:
I'm just thinking out loud here, but in the Kevin Phillips interview that I posted earlier this morning, he noted that:
What I'm driving at here is that Bernanke's "expertise," his version of the history of the Great Depression, seems to integrate awfully well with the interests of the finance industry--spend, borrow, debt doesn't matter, just keep the money flowing our direction in the form of bailout after bailout after bailout. It seems an awful lot to me like academics in service of a political agenda. And we all know where the real power is these days in the United States--in the finance industry.
But this debt issue lies at the heart of the argument made by the PIMCO executives--that debt does matter. And the only way out of our problems is by eliminating debt, something Bernanke and Paulson are loathe to do, not only for motives of profit but also because they have staked their entire academic careers on a mistaken philosophy. Huge egos are in play here, and there is nothing greater than the ego of an academic. (Just imagine someone telling you the Earth is not the center of the Universe! That the Earth is not flat! Men have lost their lives for that blasphemy.)
So has Bernanke just re-written history to fit his philosophy? Back in 1939 Frederick Lewis Allen certainly knew that it was unbearable debt load that caused the Great Depression. But somewhere between him and Bernanke that knowledge, quite conveniently I might add, got lost.
But not everyone bought into the Greenspan/Bernanke/Paulson fiction, including our two PIMPCO executives:
What people forget is Ben Bernanke's actual position-head of the Federal Reserve bank. He is employed by the banks, national and international that own the Federal Reserve Bank. He is not in any way working for the USA taxpayer-he never was, he never will be.
I was thinking along those lines, too.
There really isn't a consensus as to what caused the Great Depression. And it seems to be something that's highly politicized.
Bernanke may not even be aware of his political bias.
OTOH, maybe he does know better, but doesn't know what else to do.
Sounds about right to me. Economics is Pseudo-Science. MP3 audio in 8 parts: 1 2 3 4 5 6 7 8
i think the heart of this matter is the freidman/bernanke et al beliefs about inflation; along with the unfair advantage the US dollar has as reserve currency.
bernanke's theory of how NOT to end up in a great depression is the use of aggressively pushing money into the system at the first sign of trouble & the belief that the slowing economy will keep down inflation [that might be exacerbated some by the influx of money- though most of our inflating affects the buyers of our debt].
But with oil/energy price causing price increases they have a factor that along with the money printing will SINK [sunk?] their model. I noticed in the hearings earlier in the year bernanke's strong concern about oil prices going up & he indicated serious consequences for inflation- which i think he knew the rate cuts he was doing was already going to 'inflate' prices some.
increasing money supply is their solution & with the dollar as reserve ,unless they 'buy' our own debt[monetize], the inflation will take care of itself in a slowing economy.
High oil prices[&/or food] or not selling our debt is their nemesis, even if their intervention/theory is correct.
The PIMCO boys do separate our creditors into three categories:
I could see the countries rich in oil, or those rich in other minerals and commodities, abandoning BWII (refusing to buy our debt) quicker than those rich in low-cost human resources. After all, human resources are renewable, but minerals are not.
A consensus?
What's causing our current financial disaster is what caused the Great Depression.
Debt(WWI, war reparations, buying stocks on margin) and overproduction--a so-called bubble.
The banks are the repository of debt(not just mortgages, credit cards, student loans, car loans, disaster loans, etc.)
What happened is there was a run on the banks caused by wiseguy short-sellers and nervous foreign investors(who are pressuring the Fed).
The banks ran out of cash and had to either be 'rescued' or nationalized.
It's not political except that the political philosophy of the Republican party is that to maximize profit, the 'market' (almost) never should not be regulated.
It is bipartisan in that both Bush(Ownership Society) and Bill Clinton encouraged consumers to spend beyond their means.
Freddie and Fannie had been involved in guarranteeing mortgage backed securities(MBS) for decades. Under the mania for deregulation Fred/Fan relaxed their scrutiny under the assumption that the risk was well distributed by the new style CDOs.
But the real problem was that the rating agencies did not properly review the MBS, CDOs and there was a huge oversupply of MBS bonds anyways. When the housing boom(overproduction) ended, bond investors, who didn't know what they owned, wanted their money. The short sellers sensing blood( big profits) drove down bank values, panicking foreign investors.
IMO, the illogical belief that markets will magically benefit society if they are not regulated is the culprit.
Historically it is a joke, for example before regulation in the 19th century there were financial panics every 10 years like clockwork.
How long will it take for the overproduction of real estate to be worked off?
It never will be.
The beneficaries are big foreign ingrates(the Global Economy), who will probably run on the dollar eventually anyways.
And the economists will blame...'nation of whiners' with a 'recession mentality' rather than their sick joke of a market.
Kind of convenient to hire an expert on the last depression just in time for the next one. Several theories arise, perhaps they hired a man they knew would see the ongoing collapse thru the only prism he understood (the 30's depression or soon to be called Great Depression 1) thus he would use the tools he felt would work on the depression. This gives the money guys a chance to anticipate how he will think so they can run their games around him.
Theory 2, they knew the jig was up and figured they'd hire a guy that had a clue about what to do, since Greenspan was a complete shill and useless in the upcoming depression. Greenspan was the bubble guy, that inflated the markets, Bernake is the Depression guy who tries to engineer a slow series of collapse to deflate the momentum of the collapse. Remember the earlier collapse this summer when they bailed out a big trading bank? That was the 1st domino.
I am not a trader, but you don't have to be a genius to see whats going on among Wall Street. This jives with the economic models I've seen proposed based on peak oil. Namely, a series of weak recoveries followed by recessions, each longer and harder than the last. Its just the government manipulates the numbers to make it unclear what is happening. Real unemployment and inflation numbers, are I feel much different from those reported by the govt. agencies.
Now for the icing on the cake, I just learned the IMF is going to audit the U.S., just like they do 3rd world countries, Bush signed off on it as long as it didn't happen on his watch, so it is scheduled for 2010. Looks like they are gonna organize some WorldBank loans for the U.S.A. which means our currency is really going to go to crap.
Bernake... Heck, we need Houdini to make this economy work.
Bernanke is an expert in one particular interpretation of what caused the great depression. Not everyone agrees that Bernanke's interpretation is correct. If it is not, he's likely bolloxing things up worse than if he just sat on his hands.
I think that Greenspan, Bernanke and Paulson, and many other policy makers, don't "get" peak oil. Nerds like John Michael Greer or Jay Hanson "get" it but their message is not popular, so doesn't circulate widely. Even the FSN guys don't "get" it -- they know gasoline is going to be more expensive, and suspect that gold is a good store of wealth for hard times, but have no idea how much sheer destruction we are in for.
This time it's different.
Weatherman;
If you are so hot to bail out the Wall Street Boyz, you can you use your own money. When I had a foreclosure and bankruptcy to go through, I had to suck it up, be a man and deal with it. If I had gone to the White House or my elected representaives in congress and asked them for a bailout of my finances, I would have been taken away by the cops. When they (the "Masters of the Universe") were making money hand over fist selling Mortgage Backed Securities and other useless paper, they weren't cutting me in on any of that filthy lucre. And now that it's so spectacularly blown in their faces (despite all the lies propagated by Bush, Bernanke and Paulson about how sound our economy was), I'm supposed to pay for it? I was born in the morning, but I wasn't born THIS morning, if you know what I mean. These guys want brutal capitalism without rules, I say we give it to them. At the end of a rope.
SubKommander Dred.
I wish I could "up" your post more than once.
Hear, hear!
An amazing part of human nature is how we love "the system" as long as we are on the winning side of it, and how we change the rules as soon as the tables begin to turn on us.
Was it Bush Senior or uncurious Junior who said "We don't pick the winners and the losers"?
This bailout sure feels like a picking of the winners and the losers.
Go visit http://www.house.gov/paul/
He's still not on the same page as the writers of TOD WTR energy - but he's written a whole lot on economics.
Ron Paul was just on CNN's "Late Edition". Things must really be bad for CNN to admit he exists.
Btw, will the first CNN viewers know of the gasoline shortage in Atlanta be when the desks are empty because the presenters can't get to work?
I saw him. He sounded more reasonable than any of the other talking heads they've trotted out.
And he says he's not voting for either McCain or Obama.
Of course, he's from a solid red state, so he can do that. Still, that won't get him points with his party.
points with his party.
I don't think Dr. Paul is worried about what the Republicrat party thinks of him.
Now, if he REALLY wanted to piss 'em off he could have shown how much he loves The Constitution and sent up Articles of Impeachment at any time in the last few years. But he did not. Now is that because of the typical clay feet of the selected in office, because he thinks there were no grounds for impeachment, or his interest in 'party unity' I do not know. And Dr. Paul never got enough traction where that question could have gotten enough traction to be asked/speculated on.
other talking heads they've trotted out.
Attach the tin-foil or sometimes things techno-glitch.
http://revolutionarypolitics.com/?p=161
"Treasury Secretary Henry Paulson says the nation's credit markets are very fragile and still frozen and Congress must move quickly to pass a $700 billion bailout package for financial firms"
Denninger has already looked at the details:
The Mother Of All Frauds
He thinks it's time to break out the pitchforks and torches:
So the ex-head of Halliburton gets into office and funnels 100s of billions, possibly trillions of TAXPAYER dollars to his company and the rest of the military industry cronies and that seems to of worked out ok.
So lets let the ex-head of Goldman Suks into public office and give him a shot at the bottomless coffers of the Treasury to funnel off billions, trillions, maybe set a new record of a quadrillion (wooHoo) to his company and his financial engineering buddies.
Lets see... whats next?
At least it explains why he took the job in the first place-this guy thinks big. I can't even blame him mostly-he has been grifting his whole life and he isn't going to stop until somebody else has a bigger bazooka-doesn't look like anyone in the USA does.
Putin has a bigger bazooka and stopped him in Georgia! :-)
Being a debtor nation is not conducive to throwing your weight around.
I can't believe that at this point anyone seriously thinks that Hank Paulson is concerned about the debtor status, fiscal status, or overall standard of living status of the bankrupt entity known as the USA. I know, eventually it will catch up with him someday-he desperately needs the USA to succeed to be fulfilled. Sure.
Denninger also speculates that there would be nothing to stop foreign entities - governments? - to sell their toxic paper to, say Goldman Sachs, and then GS sell it to us.
And then there is this revealed on the Sunday AM talk circuit.
Foreign Banks Can Unload Bad Debt Too: Paulson
I hope it is correct that the US government will buy "toxic" US papers owned by foreign banks.
It is obviously good for us foreigners but quite a lot of countries are net exporters to USA and if we can not trust getting payment for our export people will stop selling to or investing in USA.
Regardless how deep your markets fall it will not be deep enough if there is no trust and you need resources form other countries.
I'm going to let you in on a little secret everyone here knows about. We're never going to pay you back. The only way you'll ever get paid back is if your neighbor, aka China, loans us the money.
In the US, we pay are Visa with our Mastercard until they both limit out. Then we declare bankruptcy. And the beauty is, in three years we'll have another Visa and a new Mastercard with an even higher limit.
A country would have to be pretty desperate to have us as a customer.
"Denninger also speculates that there would be nothing to stop foreign entities - governments? - to sell their toxic paper to, say Goldman Sachs, and then GS sell it to us."
There's supposed to be a date clause to prevent this from happening, I heard nothing would be allowed from before the middle of last week, i.e. around 16/17 September.
It's reasonable to allow foreigners with business in the US to also do this, after all it is USD debt, they are not buying GBP, or JPY or EUR.
The key here is the lack of review, not necessarily the powers delegated to the Secretary.
Part of this reads identically to 12 USC 90 (provisions relating to national banks), suggesting that a possible effect of this Act would be to place all institutions holding mortgage-backed securities under the regulatory authority of the SOT to the degree national banks are. (Well, if they want Big Mama Treasury to buy them.)
Does anyone know banking law well enough to foresee the implications of these powers being extended to investment banks?
The strict constructionists in the US Supreme Court will rule that what the Founding Fathers meant by "checks and balances" is that Herr Paulson can write all the checks he wants to and he can make whatever entries he wants to in the USA financial balance sheets so as to balance the situation in favor of them who love their freedoms to do as they please.
Sure we have a government by the People and for the People. Just remember that there are "People" (with capital P) and then there are the "people" (of lower case status).
He's just uploaded another. This one eviscerates Paulson, up close and personal-like.
King Paulson - Hope You Like It
Cheers
He seems to be channeling Keith Olberman in that video.
LOL
Meet the Noncapitulating Press
All weekend I have had two words circling around my meager brain; "Shock Doctrine." Why do I have the feeling Paulson's rush has as much to do with grabbing powers and changing the rules before anyone has a chance to read the fine print as it does with restoring confidence or saving WaMu?
Two other words? Hold on...
Mish:
http://globaleconomicanalysis.blogspot.com/2008/09/bush-administration-s...
Bush Administration Seeks "Dictatorial Power"
Mish has some good analysis, IMO, but he seems to think that it's all the Fed's fault and that things would be hunky-dory if we abolished the Fed and went back to the gold standard. I've never seen him address the problem of the disconnect between the libertarian desire for a no-regulation economy and the blatantly obvious reason that the current crisis is precisely because of lax and non-enforced regulation. Typical libertarian blindness.
Leanan,
I have a question and a comment.
First the question is will this "bailout" trigger Credit Default Swap derivatives claims against the
bonds/MBS's purchased by the Federal Reserve or Federal Government (don't know which ends up
with the paper in the vault!!)?
If it does then we are toast!!
The comment is that the short sellers could be stopped by reinstating the "uptick" rule.
If the SEC does not reinstate the "uptick" rule the odds are the Feds are "gaming" the system!
DD
I honestly don't know. Finance is not my forte, and even very knowledgeable people don't seem to be sure what this means.
And the media coverage is really annoying. They are not getting into what this bill means. Much more fun to cover political attacks, I guess.
Can't see why it would-there is no default-the taxpayer is eating the whole bill as far as I can see.
There is, finally, more open discussion of the cause of the problem.
Maybe Congress could find a way to address the cost, as in, raise taxes on the ill gotten gains of these newly rich investment bankers. I see no reason to increase the Federal debit limit to prop up these fraudsters. How about retroactively repealing Bush's tax cuts? Or, lets raise the tax on transport fuels to pay half of the defense budget. Call it "The Oil Import Security Tax Act".
E. Swanson
Why not just put a Federal Sales Tax of 6% to 10% on every transaction that happens in the financial industry?
For every 1 trillion in transactions there would be 60 billion to 100 billion in income to the government!
You and I pay sales taxes on darn near everything we buy, so why shouldn't the financial people pay sales taxes on their "purchases"?
This seems to be getting some renewed interest. Ralph Nader has been proposing this for a number of election cycles and this is how the SEC used to be funded. The percentage of the tax is usually proposed to be low (0.25%) and is in use in some countries. Here is a recent article on the subject: http://tpmcafe.talkingpointsmemo.com/2008/09/16/medicine_for_wall_street...
Chris
And Denninger has posted his SOLUTION.
http://www.youtube.com/watch?v=9KYtD-Ff_eM
Here's his letter to Finance committee:
http://www.denninger.net/letters/paulson-bernanke-senate.pdf
Here is his solution, sent to the all members of the House and Senate months ago:
http://www.denninger.net/letters/2008-07-19-Lawmakers.pdf
By the way: I cannot presently connect to the gov. websites of either of my two senators,though I managed to get through to my CongressCriminal, J. Lewis. This is what I sent him and will keep trying to send them:
Cheers
And this via CNBC with a hat tip to WRH.com:
Bailouts Will Push US into Depression: Manager
http://www.cnbc.com/id/26656750
Cheers
Hey hey ccpo,
You can't start a letter with...
...and expect to be taken seriously. When I get letters, emails, and voice mails that start like this they go straight in the trash. I don't bother to read further.
I do like Dinninger's solution. I will forward it to my representatives. For those of you who didn't read the dpf or watch the video
1) Open the books
Disclose all level 3 assets and the formula for their valuations. This will make a bank's holdings transparent and allow the markets to determine who holds what. No more guessing which bank's hold toxic paper.
2) Move all credit default swaps to a regulated exchange
This ensures adequate collateral and margin requirements are always maintained. It eliminates the domino effect.
3) Reinstate the 12:1 leverage requirement
This reduces risk. At 100:1 a 1% drop wipes out all value, at 10:1 a 10% drop is required to wipe out all value.
(This step doesn't seem crucial to me, high risks are fine as long as people know they are taking them and those risks are contained)
These seem to me like very pragmatic solutions to the lack of confidence in the markets. Opening the books ensures that everyone knows what a bank holds and can value it accordingly, restoring confidence. Moving to a regulated exchange ensures that contracts will be honored and that any particular failure won't cause defaults that cascade into systemic failures, restoring confidence.
Tim
All over this DrumBeat you see references to Shock Doctrine, intentional acts to raid the treasury, etc., but you say I can't start a letter that way?
Sure I can. More should. Were Americans more prone to calling a crook a crook and doing something about it, we wouldn't be in this mess.
Cheers
Hey hey ccpo,
If you want your representative to actually read your letter then it's not the content that's important, it's the tone. You need to look at it from their perspective. Heather Wilson is my representative, I have never voted for her and I never will, but I need her to think that I might vote for her if she heeds my wishes. Also, there are systemic constraints on what she is capable of hearing. I can't, for example, say that the deregulation that happened on her watch is responsible for this mess. Or that giving a blank check to Bush and company is a bad idea, because she still believes that Bush and Co did a good job with their first blank check invading Iraq.
Here is the letter I wrote.
I do agree with you that more people should be expressing their outrage at the situation, but in public forums not private letters. Public forums make problems visible, so outrage is effective. In a letter to your congressmen are only effective when they are presented in a way that they can hear.
Good letter, the only other point I would have tried to squeeze in if I had a representative in the States is something to this effect:
'Since I am well aware that you have always been a very firm supporter of the Constitution, perhaps I might draw your attention to the following clause in the proposed legislation' - then giving the bit where Paulson tries to make himself and his appointees over and above the law, and not subject to the Courts, the scamming thief-
'whilst urgent action is undoubtedly needed, in their enthusiasm to engage the problem, inadvertently these people without your experience of the need to honour and observe the Constitution have stepped outside it's bounds.
I know that we can rely I you to watch with your usual vigilance that no unreasonable or unconstitutional powers are granted, whilst ensuring the speedy passage of appropriate legislation to support the economy and the people of this country.'
Thanks for the summary.
And yes, you are 100% correct. It's essential to be polite when writing to congress critters, or you're just wasting your time. If you're rude, your letter will never get past the lowly clerk whose job it is open and screen mail. It will go straight into the circular file.
If my letter had been rude, you'd have a point. How is it rude to ask if my rep is a patriot or a partisan? If I can get through to the Dems that represent me, I'll say the same to them. It will be the exact same letter, in fact.
You people have a seriously messed up view of the world, imho. Play your PC games. I refuse to do so where the future of my nation is concerned.
And, truly, explain to me how it is rude to ask that question. What a bizarre world we live in where people think such things... After all, if you accept the Shock Doctrine as having merit, then you *must* conclude that any and all who would participate in such a process are NOT patriots in any way, shape, or form.
Cheers
Are you insane?
I'm not being rude, I'm just asking. ;)
Does Mr. Bush's quote say what it seems to say? That the markets need a government bailout, because the markets don't really work? That it's really just a pretend free market economy, and the default is a command economy, unreviewable by any court or third party?
http://www.bloomberg.com/apps/news?pid=20601087&sid=acVoMK3FiuqQ&refer=home
I am truly perplexed now.
If your only tools are a pen and a balance sheet,
Every problem looks like a financial restatement one.
Where is the New Deal for American labor? Where is real and physical wealth being created? How come Congress does not pour 7B ones into building a new electrical power superhighway and windmill farms all over the country? Something smells hollow in EarmarkLand. But then again, EarmarkLand was built for the elite and well connected, not for the working poor.
Absolutely agreed, Step Back.
The concept of equity in this is totally absent. For everyone, but the economically disadvantaged will feel the brunt, and will have no recourse except their votes. Perhaps this is happening close enough to the election to make a difference, but how much will any candidate in any race be able to change the scenario? We will still have the car loan and credit card debt crunches and peak beer, and oil, to deal with after this debacle is settled. Perhaps we can just fund this thing with mythical dollars equal to $ 2.1 trillion, and just assume that the other ghosts under the bed will be no bigger than the mortgage crisis was?
With respect to all of us who do not have mortages, car loans, or credit card debt and do not own any stocks, bonds, or money market funds , and did not contribute by our personal actions to the current crisis, and do not directly benefit from the moves being made to avert worse implications, we are not being treated fairly. Further, I feel confident in saying that the majority of Americans similiarly did not directly cause either the current or the anticipated problems, and will not directly benefit from the massive financial debacle aimed at solving the current problem.
The illusion of "democracy" is part of the sham of the oligarchy. Consider South Africa: The Afrikaners gave the vote to the black majority but saddled the new government with so much debt that the elections were basically a fraud. The "means of production" were retained by the minority.
All of this is beginning to sound so trite, like Abbie Hoffman in the sixties, but it's true never-the-less.
Obama/McCain 08'
Joe
For everyone, but the economically disadvantaged will feel the brunt, and will have no recourse except their votes.
Bull. People have their money that they can vote with. Decide on what they buy. The internet and search engines allow for education on where to spend their money.
In fact, voting with your wallet may be the only effective vote one has.
Isn't actual insurrection still an option?
Isn't that what all the guns are for?
Come on, let's have a revolution!
I'd love to join you but I'm not eligible.
This reminds me of the rush to approve the Patriot Act. Panic. Pure panic and a classic case of swooping in and pillaging the treasury and the American people to save millionaires' and billionaires asses. Let us institute an orderly process with hearings to hear other sides of the story and alternatives to this bailout of the rich and irresponsible.
Yes, this could trickle down to American public as a whole and cause a severe recession and even a depression. But ways should be explored which helps real people directly and not through the rich. Consider better ways of spending a trillion dollars.
This reminds me of a rush to war, like the Iraqi war, for example, without calmly and carefully considering all the facts. Paulson is running over the congress as if they were little pre school children. Good timing, though, as Paulson knows all the congress people want to get back to campaigning as soon as possible. Why did they wait this long to hatch this plan? Wasn't it obvious months ago that radical action was required?
Schock Doctrine/Disaster Capitalism on display.
I see this proposed act as something more than "disaster capitalism." To me, it is a coup of the government to achieve a corporate state. Here is a person who will have unlimited spending powers without over sight. The cost of this will bankrupt the states and local entities so that everything will be privatized. This goes far beyond simply giving your buddies a license to loot.
Further, this sort of thing wasn't hatched a few days ago while having a beer. My guess is that it has been in the works for 1-2 years and anything that has been done to date is/was only window dressing; knowing from the outset that it would not work and, in fact, create the crisis necessary to officially propose this abortion of constitutional legality. This is the "October Surprise."
We are entering the Atlas Shrugged Zone. People better be ELPing like crazy before it's too late. In fact, I would carry it further, people should be prepared to survive pretty much on their own or with friends.
Todd
My feeling is that Paulson was put in the job specifically to pull off this coup of sorts.
Have you read the Shock Doctrine yet Todd?
Another textbook example.
So much like the passing of the Patriot Act too, it looks like this was prepared long in advance.
Cycle,
Yes, I read it when it was just published along with Crossing the Rubicon, Catherine Anne Fitt's stuff and on and on.
What is being proposed is a coup, plain and simple. Even disaster capitalism doesn't seek to have some unelected person given the powers of a dictator over the country's finances. And, that is exactly what this act proposes.
Todd
Remember, you vote on November 4th, the Electoral College votes on December 15th. They don't just have to hold it together for you, they have to hold it together for the electors. If something funny happens in the voting and then the dollar implodes, a lot of Republican electors are going to think about defecting in place.
And how about this take from the Telegraph:
Financial crisis: Default by the US government is no longer unthinkable
I really think they're just trying to get past Nov. 4. Neither the Democrats nor the Republicans want the spit to hit the fan before the election.
"Spit"?
This guy has great swagger but I'm pained to find anything PG13 to quote: Bush’s final f-you to the American People: bankruptcy(Suprime Showtime)
PS No need for lecture on decorum Leanan, I dig why you discourage profanity (public servers etc). Had a great chat (telephonic) with eastbay at PO.com yesterday too, he got the ball rolling on toning down the $#*&$*! over there as well.
The edict has come down from on high:
Haven't we seen this administration play this very same hand 6 years ago with the "mushroom cloud" scenario? If this feckless Congress goes along with this (deleted expletives)scam, then perhaps this will be the end of the American Middle Class. Wasn't it a short three years ago that "W" was holding town-halls trying to sell the nation on the idea of dismantling Social Security in favor of throwing it into the Corporate Free Market Economy? If the Federal Govt hadn't plundered that "social government" fund it would still be solvent.
Who the hell are these guys and who do they really represent?If this "crisis" is that serious then maybe we need to spend several months of open debate trying to decipher this mess and come up with some clear directives. When I think about these corporate pirates making national policy in the middle of the night it scares the sh*t out of me.
This appears to be right out Milton Friedman's playbook "Capitalism and Freedom".
Is anybody paying attention?
Joe
Like I said the other day Americans have been swallowing bigger and bigger lies for so long that truth is no longer an option.
Seriously though, is there no lie too big for the hungry American palate?
I would agree that the government is just trying to get past the elections.
It is hard for me to see a way this can turn out well. If the government buys a portion of the toxic securities, it sets a price for all the others. It seems like this is going to put more financial institutions into difficulty--ones that were carrying the debt for higher values.
And of course, the debt of various kinds will default however they do, eventually, making the real cost different (very likely higher) than the current cost. If people are guaranteed to keep their homes, the number of home defaults will go way up.
It seems like the world will back away from US debt. There is no way the US will be able to pay back all this debt in dollars that mean anything.
I agree. The world will back away, because default or no, they don't want to play the game when the rules can change randomly.
Re: when the rules can change randomly.
Changing the rules is standard operating procedure for maintaining control and power. One should always expect it IMO, especially if the PTB find themselves backed into a corner by past bad decisions or mistakes.
The recent changing of short selling rules for financial stocks is a prime example. Rules governing short selling were not enforced which was a mistake. As short selling got out of hand the only way to control it was to ban all short selling in financial stocks, which was a big rule change. It was either change the rules or watch short sellers, naked or not, run the financials down close to zero.
Rules should never be trusted, but always questioned. Rules can usually be bent, sometimes avoided and frequently just ignored with little consequence.
Questioning and doubt are more rewarding than trust and faith IMO.
I'd sure like to hear a discussion of all this that didn't take MONEY so seriously. There's a whole lot of valuable stuff in the US, and a key question is who is going to end up with it (see end of Communism for scary comparison). My guess would read something like this: For many years America has received oil and other goods from overseas. In a normal way they would send equivalent value of goods and services back. Instead they have, to a significant extent, sent bits of paper saying "we won't give you goods and services now, but we'll give you more later". These bits of paper include: dollar bills, equities, bonds. Of course this has been at the instigation of the external parties: China buying dollars to keep the Yuan down, oil sheiks investing, everybody thinking the USA was the safest place to invest. Now that it has got to the point where "send lots of goods and services" is never going to happen in the required quantity there is a problem.
But USA has an advantage that nobody else would have: Its debt is all denominated in US dollars! Somewhere out the back there is the printing press. So there are two options:
(a) Let companies fail, wiping out all that foreign equity. This would be very like the end of Communism, with a very interesting set of characters ending up with all the stuff.
(b) Inflate the debt away. People have got to stop thinking that when the government borrows money from itself to create money that this is real "national debt".
Now if Poulson goes to the market to raise his $700 million then this is a BAU option. It just allows the recycling of petrodollars into US bonds instead of corporate paper. America could probably soak up petrodollars like this for quite a long time before somebody twigged that one day this is all meant to translate into goods and services exchanged for oil, and that the chance of it ever happening is not going up.
I disagree. I think China, OPEC, etc., have already expressed their displeasure with how things are going. They aren't going to keep giving us goods for paper. This, IMO, is going to be the real problem.
http://www.timesonline.co.uk/tol/news/uk/article4795052.ece
With Bush's 10 year Treasury bonds due ot come due in the next couple of years, co-inciding with Reagan's 30 year bonds, US funding needs rise to a peak.
If you consider the latest bail out proposals too, then it is perhaps likely that interests rates will have to rise sharply to attract funding, aside from considerations that the Chinese and others may be in a mood to drive a harder bargain.
The impact of a large interest rate rise on house prices and the rest of the economy would do damage to the banking system which would dwarf any benefit from the measures to buy bank debt, and in fact that measure by damaging US creditworthiness may in itself be counterproductive before other factors are taken into account.
This is a slow-motion train wreck and the front grills of the two colliding trains have barely touched.
The stock market crashed in 1929, but the trough for economic growth didn't come until three years later, in the summer of 1932. And the depression lingered on for years afterwards.
I'd say we haven't even reached Black Friday yet.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/22/cnpaul...
I thought that Sept/Oct would see 'Black Fridays' with the stock exchanges loosing perhaps 1/3rd to 1/2 of their value, however so far rigging and intervention seems to have held them up.
My guess would still be that it won't be possible to hold out to the end of October without a major correction,
Saw this quote highlighted on PO forum
Well I meant to imply that it would eventually come to that. My take on the current situation (US dollar not under much pressure) is that it isn't happening yet. And when it does happen, and the US dollar is cheap, then the US economy will start exporting and the outflow of goods and services will actually start to balance the net inflow we've seen over recent decades. However if China and some oil exporters insist on saving money then somebody has to provide an equal and opposite amount of dis-saving (borrowing) or things will grind to a halt. We need a borrower of last resort. This is where money confuses us. There is a sort of saving that is not a zero sum game: that is stockpiling stuff, and boy do we need to do some food stockpiling. Of course when people buy stuff in advance against an uncertain future they get vilified as hoarders. Acquiring stuff that is going to be in short supply later, forces the price up earlier than it would otherwise do, so that necessary development of alternatives takes place BEFORE it is needed. Yet we can guarantee that politicians will blame everything on hoarders if there are any. Sigh.
Perhaps a radical new tack will be tried - investing in something which may actually increase productivity in the future, rather than dodgy financial instruments based on a pyramid scheme of ever-rising house prices.
A massive investment in renewable and nuclear energy production, together with new rail and electric vehicles would seem a good way of soaking up the excess funds, for a start.
Micro-loans to the third world peasantry would also drag billions out of poverty.
What is funny about the whole thing is that the whole financial industry model based on undervaluing liabilities, overvaluing assets and rosey promises is on display with this latest scheme.
A minor quibble. Most people don't "own" their homes. The banks hold the title until the mortgage is paid off. The rhetoric from Washington about allowing people to "keep their homes" ignores this fact. The way the loans were given out, lots of those mortgage holders bought houses that they could not be expected to pay for. Not to mention the fact that the price of houses is continually bumped up at each re-sale as the commissions paid to the real estate agents is usually added to the price of the house, as houses tended to be sold every few years.
I think the price of houses may drop much more as we find that the actual cost of building a house drops to a reasonable level and people start buying smaller structures. In a recession/depression scenario, the cost of labor is likely to drop too, with many more people begging to work at jobs now performed by illegals. Locally, it was just announced that the unemployment rate in North Carolina was 7%. What's the cost of building 2 or 3 BR apartments? There's no way to know how far down the price of housing will fall until it's over.
E. Swanson
Well, it makes as much sense to 'give' the beleaguered home mortgagee a break as to 'give' the disgustingly overpaid financial people the vulgar salaries and commissions they get.
I have no faith whatsoever that the pain will be justly distributed. Torches and pitchforks indeed.
Some scenarios I've discussed before. Let's assume that Bush/Cheney are Peak Oil aware, and more importantly, keenly aware of the Net Oil Export problem. Two obvious implications: (1) The federal debt will never be repaid (so why not max out the credit cards) and (2) The most valuable real estate in the world is in the Persian Gulf area.
If the US controls the flow of oil from the Persian Gulf, several options are open to the US--from outright debt repudiation to paying back the debt with dollars of rapidly diminishing value.
westexas -
I have always taken it as a given that the Bush Regime has been completely aware of the impending oil supply crunch, as I believe Clinton and Bush The First were also.
It should now be quite apparent that a strategic decision was made some time ago that the real (albeit unstated) energy policy of the US will be to militarily dominate the Middle East and parts of Central Asia so as to be able to control the flow of most of the oil coming from those regions. The various initiatives regarding energy alternatives and energy efficiency have essentially been feeble attempts to mask our militarized energy policy. If anyone doubts this, I invite them to compare the amount of money spent on such with the amount of money spent on the US adventures in Iraq and Afganistan (rapidly creeping toward a $ trillion).
This has been an incredibly reckless gamble devoid of any Plan B if we lose. Perhaps it would be more accurate to say, 'now that we have lost.' There is no way that either Iraq or Afganistan can be considered a success by any criteria, much less with regard to the main objective of securing oil supplies for the US.
To have any leverage with any future Iraqi government with respect to preferential treatment for US oil companies the US will have to maintain a large permanent garrison in Iraq under a constant 'Fort Apache' atmosphere. And even that is no guarantee. And does anyone seriously think we are ever going to get control of Iran's oil? Or the oil from the various 'stans' of the former Soviet Union? The recent debacle in Georgia serves as an embarrassing reminder that the US cannot throw its weight around in Russia's backyard.
The military solution to our energy problem has hardly been a success and shows all the signs of leading nowhere except toward an escalating multi-sided resource war, the logical endpoint of which is a possible nuclear exchange. Unfortunately, the US has succumbed to the gambler's trap and is now doubling up on the next round in the hope of winning back what it has lost. We know how that usually turns out.
Even if the US did managed to gain control over Mid-East oil and forced everyone to pay for oil in dollars, any repudiation of debt or intentional devaluation of the dollar through inflation will surely turn our present foreign creditors into former creditors. While you can get away with stiffing your creditor once, don't expect to be doing anymore business with that person.
It should now be quite apparent that a strategic decision was made some time ago that the real (albeit unstated) energy policy of the US will be to militarily dominate the Middle East and parts of Central Asia so as to be able to control the flow of most of the oil coming from those regions.
Unstated?
Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.
eric blair -
Trouble is: that statement is intended to make the US appear to be the protector of the Persian Gulf from other countries trying to take control over it, rather than saying it is WE who are ones trying to take control.
This is why it's always been the party line to say that we are in Iraq and Afganistan to fight terrorism, bring democracy to these poor benighted people, blah, blah, blah. For oil? Never! Rumsfeld even said so.
I agree 100% with your assessment.
Chalmers Johnson has written three books related to this subject: "Blowback", "The Sorrows of Empire", and "Nemesis: The Last Days of the American Republic". There are several hours of his lectures posted on YouTube as well - very worth while.
The American Republic may very well be coming to an end. I see that Rove's slime machine is again on full output:
Nicholas Kristof - NY Times
Democracy requires more than just the ability to vote (and have the votes counted honestly) - it requires voters who can think for themselves. And to think about issues, you must have access to factual information.
Fox News and the rest of the MSM is setting us up for a Brave New World.
IMHO, democracy in the US is dying as I watch - and it is very, very sad to see.
calgarydude -
Indeed, it is heartbreaking to see what has become of America. There was a time not so long ago when I was proud to be an American, but such is no longer the case. I happen to know a couple who were traveling abroad a few years ago and tried to pass themselves off as Canadians. (Couldn't quite get their 'ABOOTs' right, though.)
I grew up in solidly middle-America during those dim distant and now mythical 1950s. (Ozzie Nelson's hometown in New Jersey, actually.) Despite the Cold War, fear of the Bomb, and the McCarthy commie witch hunts, it was a pretty good time to be a kid (provided, of course, that you were white and lived in a decent suburban neighborhood).
But it's not just about nostalgia. There was a different attitude back then, which is almost non-existent in today's America. There was a sense of community, an optimism that one's kids would have things better, and a general sense of belonging and that people were reasonable.
Even cops were different. Back then, you could reason with a cop, who more likely than not was a member of the community himself. Now, the model of behavior for cops, particularly among the younger ones, is that awful TV show, Cops. And just look at any recent footage of public protest events. The cops are decked out in such outlandlish riot gear that they look like imperial storm troopers out of Star Wars. Anyone who can't see a nascent police state forming in the US has to be delusional and/or blind. And our legal system is now longer about justice but about social control. (More people in jail then even China.)
Well, America had a good run while it lasted. God save us all.
joule -
I was born in 1946 and I remember watching Roy Rogers on TV, Howdy Doody, and Dinah Shore singing "See the USA, in your Chrevrolet...". Innocent times.
We often went down to the US to visit relatives in Massachussetts and NY. Border guards were very friendly and helpful and Americans were generally much more outgoing and enthusiastic about life than Canadians. My 21st birthday was in San Francisco (1967) - summer of love and all that. Beautiful city and beautiful dreams.
My second year at University, I spent an entire term studying the US Constitution. More people should read it (and what the founders wrote as well). And more people should read the Bible instead of watching preachers on TV. Both have an enormous power to inspire.
The current political system is going to fail due to its own excesses. When it does, the way will be open to something different. Maybe reduced wealth will force people to share with others and to look inside themselves for strength.
I still hold out a sliver of hope in the local, grass-roots movements across this country to be an effective method for change. There is just a tipping point to be reached. Not quite there yet. We almost hit it earlier this summer and it was yanked away at the last moment. These moments, were the chaos behind the curtain is momentarily revealed, are happening at a quicker pace with ever more futile attempts to hold them at bay.
Recently posted by memmel:
http://my.opera.com/richardinbellingham/blog/army-combat-team-to-deploy-...
If people don't understand the Constitution-busting nature of this, we are even further along the road to perdition than I thought.
Cheers
I agree with the general sentiment, but it seems like the Constitutional prohibition is against quartering troops in citizens' homes. The prohibition against using troops for law enforcement came later, and is statutory, not Constitutional. Am I wrong?
http://en.wikipedia.org/wiki/Posse_Comitatus_Act
Ah, yes. Thanks for de-stinking my brain fart.
Cheers
The "slime machine" wouldn't work on a people who weren't too stupid to think for themselves. +1 for Chalmers Johnson's books.
I don't think any society has ever had enough people who had learner how, and were willing to use the discipline to think for themselves. At least not for a democracy with one man one vote. Especially given the huge advances in the science of propaganda
Um...
I'm in the UK but we seem to face the same problems as the US. In particular the economic situation will probably be the key issue in the next UK election. I've got several degrees including a science PhD and I don't understand the current financial situation and what the "correct" political solution to it is. That's not to say that I think I would be too stupid to understand it, but that I don't because I really haven't had the time to think and analyse things, particularly to learn the ways that economic information and statistics can be presented in a misleading ways. (In case anyone points out various financial blogs, I read some of those and vaguely follow the case they're making but I don't know if they're right; I haven't even really figured out what their various agendas are and what their inviolate "sacred cows" are.)
I think suggesting that everyone doesn't have the discipline to think for themselves misses the point: they don't have the time to spend figuring out things and spotting misleading information. (I'll soften my previous stance and admit a significant proportion might genuinely be stupid.) If you look back at how little governing was actually done in, say, nineteenth century Britain, because the world was much less interconnected so there was just less governing to do, most voters were voting on the basis of one or two vague "keyword" concepts about the local candidate and his party and wouldn't know what to do with the huge volume of political material broadcast these days.
What would you think of a "science" that did not use the scientific method? What would you think if this "science" instead used philosophic style argumentation as its primary mechanism of "discovery"? Would you trust such a science? Would you even guess that it's impact on society would even be neutral? Or would you rightly condemn it and fear that it's impact on society could be harmful given that none of its postulates had been verified by commonly accepted scientific methods? What if this "science" controlled all manufacture, trade, and political processes?
This is economics. This is why there is no true Nobel Prize in economics. (The Nobel price for economics is given by a separate organization, basically stealing the name of Alfred Nobel in order to legitimize economics. The official name of this fake Nobel prize is "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel".)
Until homo sapiens develops a true science about resource acquisition, trade, manufacture, etc., there will continue to be crises like the current one.
Let us just suppose that we could find and elect a President of the USA that had not been castrated by politics.
This President put forth a Presidential Proclamation prohibiting the importing or exporting of any petroleum products into or out of the USA.
Instant decrease of 15+ million barrels per day of demand plus 15+ million barrels per day of incresed supply (to the rest of the world).
Oil prices would crash to under $10 per barrel. As the major oil suppliers are all a bit overextended financially this would cause those countries to go broke. During the transition the USA would not be able to import all those cheap goodies from Asia so thier economies would go down.
There would be a lot of financial pain in the USA, but we would survive and be in far better shape after the pain?
Just a neat thought, no chance of it happening, but still a neat thought?
Let's suppose a flock of pink unicorns alights upon the White House lawn and converts one and all to peace and light. A New Dawn arises, a Golden Age of freedom from want and stress for every man, woman and child on Earth.
It's about as bloody likely, but as long as we're supposing...
I hardly think so...
Bush and Cheney are peak oil aware!! Wasn't Matthew Simmons an energy advisor to Bush? It's known that he mentioned to Bush the implications of peak oil and what it means.
Bush/Cheney aware of peak oil, hmm.. Cheney absolutely, check out his holdings, high grade foreign currency denominated bonds.
Bush, I'm not even sure he is sentient, didn't he hit his head eating a pretzel? I'm pretty sure he is a figure head, I don't know who talks into the earpiece he wears, but I'm pretty sure its not the secret service that is telling him what to say.
Yeah its a definite maybe, devalue the currency, collapse the debt, leave China holding the bag, and all the administration's friends get to loot Wall Street, looks like a win/win to me, except of course for everybody who isn't a friend of Bush/Cheney. On the upside soon we'll get to learn how to recognize our new currency. Will Ronald Reagan be on the new 100$, will inflation be so bad we'll have 10,000$ notes? The future will be interesting, and most likely painful as well.
Someone keeps rating down Leanan as a general rule. I'm curious about what's so wrong with what Leanan says. He seems to have his head screwed on fairly straight and points out some very interesting news items.
Leanan is a she, and has her head screwed on quite straight. She's also the moderator for the Drumbeat threads, and must, on occasion, remind people to remain civil, or on topic, or keep it brief, etc. Once in a while she has to delete posts that are way out of line. I've never known her to take action without very good reason - in fact, she's more tolerant of some of the wackier elements around here than I would be.
I suspect whoever is modding her down is a disgruntled poster who feels put out by having a post deleted or something like that. Just a childish lashing out. I could make some guesses as to who it might be, but I won't.
Thanks, sgage. I should have been able to guess from the mastsidebar...
Actually, the government has been in danger of default for some time now. Present models the federal liability under Price-Anderson are based on low density mid-western locations for the site of a major nuclear accident. However, our worst run reactors, those with repeated serious safety and security violations, tend to be in high real estate markets with $400,000 per one third acre of property value not uncommon. The federal liability is thus very large and could bankrupt the government should it have to be paid.
With an interest in AIG now available, it makes sense to clear this liability off the books, lay it on AIG and privatize it I think. The alternative, should the US default for other reasons, would be to immediately close all nuclear power plants since a US in default could not pretend to be ready to deal with the payout for a nuclear accident which comes to $870 billion in property damage alone for a 19 mile radius exclusion zone.
The problem of insolvency for the federal government has been around for more than a decade now owing to Price-Anderson together with increased growth and increased property values.
Chris
I've posted this at Gristmill as well.
The problems have no feasible political solution!
Start here: http://questioneverything.typepad.com/question_everything/2008/07/what-i...
Then follow the links (at the top right - "Is there a sapient form of governance?") through to the present to read about some fundamental approaches to real solutions. In order to solve a problem you first have to actually know what the causes are.
As events unfold I should think it would be clear to all objective observers that the old ways of looking at things, the old way of solving problems, no longer hold. You can't talk out a forest fire.
Question Everything
George
In order to solve a problem you first have to actually know what the causes are.
There's a very good book out called "Bad Money" by Kevin Phillips. More precisely:
Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
It's all there. You can't run an economy selling paper. Remember M3?
Actually, in order to solve a problem you have to eliminate the cause(s).
What we have today is a cluster of interlinked exponentially deteriorating systems, the ultimate cause of all of them is parasitic human population.
Nature will find a way.
And yet, politicians and unelected officials feel that they must "do something," even if doing nothing is perhaps the better course. This bias towards action gets us into even deeper trouble, imo.
Dragonfly, I think economics has everything to do with energy, and energy has everything to do with the economy.
Bill Moyers had this interview with Kevin Phillips on our ongoing economic upheavals:
http://www.pbs.org/moyers/journal/09192008/watch2.html
Transcript here:
http://www.pbs.org/moyers/journal/09192008/transcript2.html
Phillips identifies Peak Oil as one of the "seven sharks" closing in on the US economy:
You might also find Nobel Prize-winning, MIT economist Robert Solow's rebuttal in The New Republic to Phillip's claims of Peak Oil interesting:
As to the most recent bailout that we are talking about today, Phillips had this to say:
The same Robert Solow that has claimed that we can 'in effect' get along without natural resources. Don't have a link, but I promise I'm not making it up.
ET there was an "IF" in there. He was answering a question.
"If it is very easy to substitute other factors for natural resources, then there is, in principle, no problem. The world can, in effect, get along without natural resources." Solow
http://www.answers.com/topic/robert-solow
Hello Lynford,
Thxs for the Solow Quote. I wonder what his response would be to try and substitute for the Elements: NPK, sulfur, and H2O? It would be quite the miracle to grow healthy plants, animals, and us humans with the substitution of other Elements that are toxins, heavy metals, plus the radioactives. IMO, economists can look remarkably inept because they don't [can't?] enlarge their mental outlook.
A temporary layer of duct tape over his nose and mouth would instantly give him a strong appreciation of the difficulty of maintaining flowrates and finding meaningful substitution.
LOL! Thanks for that Bob. The big IF is really, really a big IF and it is a big IF that economists largely ignore. To Solow's credit, he actually mentions it, but I doubt seriously that it informs the rest of his economic philosophy.
I once heard an economist debating China's coal and water shortage problems. This economist talked about 'once substitutes are found[for coal and water]' and my jaw was agape. As far as I know, no one has yet come up with 'instant water.'
Dragonfly, the PIMCO executives Chris Dialynas and Marshall Auerback also believe that the economy and oil, as well as the militarization of our country, are all inextricably interwoven:
I agree, but in the past TOD has had debates whether we should deviate too much into pure financial discussions. That's why I put that caveat out there. It is one reason "The Automatic Earth" was birthed by Stoneleigh and Ilagri. It's TOD history.
Just covering my bases.
Speaking of Stoneleigh and Ilagri, I think most here at TOD would love to hear your insights. I know I would.
Economics and finance are on topic, especially for the DrumBeat. I usually don't post those articles up top unless oil or energy is specifically mentioned, but they are very welcome in the comments.
I know and I'm not swiping at you or any of the editors. In the end, the creation of Automatic Earth was the right thing and gave Ilargi and Stoneleigh more freedom to go and say what they want. There are times though, here at TOD, when we need to focus on the fires in front of us and keep the others on the back-burner for a bit.
This one coming down now is a frickin firestorm and we need to know what we are getting into or we could regret our haste. I believe you agree with this, but there are other posters here that may think this discussion does not belong here.
India's Mukesh Ambani's Reliance Oil Field in the KG Basin starts oil production, initially at a flow rate of 5000 barrels a day, but eventually moving upto 5,50,000 bpd by March 2010. It is a deep water oil-field, and one website estimated it has about 175 million barrels of oil. The field holds 8.6 trillion cubic feet (tcf) Natural gas reserves.
Source: http://in.reuters.com/article/businessNews/idINIndia-35562920080919
http://www.utvi.com/industry-news/oil-and-gas-industry-news/10566/relian...
Bloomberg has an article about Reliance expected deepwater oil production:
http://www.bloomberg.com/apps/news?pid=20601072&sid=acPaQ09srqaM&refer=e...
According to the EIA India produced, "...846,000 barrels per day, of which 77% was crude oil," in 2006.
The addition of 550,000 barrels a day production from one deepwater block will substantially increase India's production. It is like a surge in production and not India reaching a peak. More deepwater projects to ocme.
Interesting to learn that we're approaching the 100th anniversary of the Ford Model T - the first mass-production car and arguably the most influential car of the 20th century.
OK, two comments on the link below:
1 - If Jon Stewart does not use the name of the House Minority Leader from Ohio in a crafty joke about the current finance system, he is missing a golden opportunity for a good chuckle.
2 - I've seen the bit about "You can't describe how ugly it would look if we don't act" several times and I would actually LIKE one of the people "in the know" to tell me exactly how ugly it would be and why it would be so ugly. No one has fessed up to how bad the balance sheets REALLY are here. It is equivalent to a doctor saying we must amputate your leg because it "looks" real bad. LET ME SEE THE DAMN X-RAYS FIRST. Then I may agree with you or not, but at least let me take part in that decision!!
Paulson urges 'clean and quick' OK
Boehner at what point said something like, "I can't say what it would be like on Sunday morning." At that point, I started contemplating the possibility of cannibalism, prostitution, and the utter destitution of prosperity gospel preachers.
I absolutely agree with #2, but I think your answer is going to be "this paper is just worthless." See Mish's post: "US Taxpayer: Giant Dump For Illiquid Assets" http://globaleconomicanalysis.blogspot.com/search?updated-max=2008-09-19...
The reason the assets are "illiquid" is that they are worthless, or close to it.
Fortune has an interesting article on "Pollyanna creep":
http://money.cnn.com/2008/09/19/news/economy/siklos_shadowstats.fortune/...
I'm on record here on TOD with my conviction that a goodly dose of "Pollyana creep" has worked its way into the EIA figures, at least those dealing with domestic natural gas production.
John Williams, who has been following Pollyanna creep for years, had this to say about the phenomenon:
The genisis of the idea that the United States has an abundance of natural gas seems to be Boone Pickens and Aubrey McClendon. So what are they selling?
For one thing they're selling stocks in companies that are involved in the domestic production of natural gas, and the inflated production figures make it appear like those companies have more future potential than what they in reality might have.
But they're also selling public policy initiatives--massive subsidies to promote natural gas as a transport fuel. And they need to show abundant supplies of natural gas in order to justify those proposals.
It's going to take a year or so to finally know, but I remain convinced that this 9% YOY increase in natural gas production that the EIA, Pickens and McClendon are touting will, in the long run, prove to be illusory.
Wouldn't be a surprise in Grifter Nation.
I'm on record here on TOD with my conviction that a goodly dose of "Pollyana creep" has worked its way into the EIA figures,
I am talking about this today at the ASPO conference. I discuss what the EIA does well (provide energy statistics) and what they do poorly (make forecasts). If you go back and look, their oil price and production forecasts have been stunningly bad. In fact, I got into a debate with the EIA's Doug McIntyre last year about gas prices. He was writing TWIP at the time, forecasting falling gas prices last spring. I made the case for rising gas prices based on falling inventories. Guess which direction they went? :-)
As the era of discovering giant oil fields wanes, the world turns to prospecting for tiny pockets and vugs of oil:
http://news.bbc.co.uk/2/hi/business/7572729.stm
Gotta score one for Matt Savinar-does anyone still think the USA government is actually going to attempt to mitigate oil depletion in the interest of the USA population and the overall economic strength of the country?
Looks like we may have a tropical depression forming off Puerto Rico
HWRF and GFDL send it gently into the Atlantic with a trough...
What if the US switched it's consumer transport fleet to be more like Euro? I understand that most vehicles in Euro run on diesel. True? What would be the implications of ramping US supply of diesel if this were to happen? I say this because of this MSM article on Ford's 2009 Fiesta ECOnetic. Detsined for sale only in Euro.
http://articles.moneycentral.msn.com/Investing/Extra/the-65-mpg-car-ford-won't-sell-in-us.aspx
You can only get a certain proportion of diesel per barrel of oil, so you can't just swap the refining all from petrol.
You would end up with a surplus of petrol and not enough diesel.
Petrol fired power stations?! Or a Mad max style world where everyone has petrol generators out back! (And V8 nitro boosted engines to feed!)
Why is Europe doing this then?
For many years diesel was the surplus from a barrel of oil, so it was a lot cheaper.
At teh time it was very nasty stuff, throwing out lots of particulates, but now that it has been fairly well tamed it is not only needed for trucks, but there are a lot of European cars which run on it so it is in shorter supply than petrol.
In addition to DaveMart's good points, the other thing to note is that Britain (I don't know about Europe) transition from almost overwhelmingly petrol cars in the 1980s (I worked very briefly as a petrol station attendant) to the current level of diesel car usage by people buying a diesel car at the point they were buying a new car anyway. That is, unless you're changing car anyway so you'll eat the depreciation loss regardless, selling a working petrol car and buying a diesel car doesn't make economic sense.
Given that people will probably be changing cars less frequently due to global economic conditions, I wouldn't expect much change in the US.
One reason that the U.S. oil companies are able to import gasoline is that there's a surplus of gasoline in Europe now that the car market is switching to diesel cars. Gasoline is still too cheap in the U.S. for that to happen here, IMHO. Even as the local gasoline prices hover near $4 per gallon, the cost of fuel to the consumer in Europe is more than twice that level.
E. Swanson
Please excuse me, but this would take at least 15 years to happen, which we don't have. Besides, it depends on starting TODAY, which is not happening, and is not going to happen.
A few people have been calling for imf/world bank help for the current financial crisis. Though none of them here so far.
I thought it would be a good idea to remind people here what exactly this means by looking at what these two originations have done to several country's. For those of you who have not seen the documentary 'A world Without water' this is what would happen here.
Complete Privatization of the following utility's
Now on the surface this may sound ok, even good to a few of you. To put it bluntly it's not if you look at other country's and the requirements of this to satisfy the demands of the world bank and imf to get the loans they needed. Lets start with water.
As a result of the above people who are behind on their bills can be easily cut off, same with low volume users(those who use too little to be worth servicing). Though now that they own the pipes they can some nasty things to prevent you from reconnecting easily or at all like ripping out your house plumbing or pouring cement in the pipes since they own them now. For those who are still connected, unless your a large company or in a rich neighborhood 24/7 service will go away and you might even have only a few hours a day when you get water.
Electricity and gas would be treated to the same treatment though with some differences, obviously one can't pour cement down wires. Nor one can easily get natural gas from non-utility sources.
IMHO the world bank has just been a tool of the USA to force countries to open up to US companies.
In the past 100+ years there have been many regime changes undertaken by the US to achieve the same goals.
No politician would dare say this:
A debt bubble must be paid down by a slowed economy. We can only choose the terms of the slowdown.
Once we accept this, the power of the rich to raise the spectre of Depression if they don't get their bailout is destroyed. We will debate, essentially, powerdown. It should be at least a 10 year plan. It will lay out how the money we WON'T spend on the bailout will be used to keep Americans alive during the worst-case scenario.
Now if we really want to be radical, we can propose a complete debt default, and build a plan around the total loss of $2 billion a day in foreign investment. But I'm excited by the possibilities. We would have to make our own stuff again, or swap all our used stuff with each other on e-bay to maximize utility. We'd have to cut our oil consumption by at least 60%. On the other hand, if trade restarts it would at least be built on a sound foundation.
OK, the first encouraging thing concerning the "plan" I've seen today. There is NO reason this should not be acceptable to Paulson.
Frank Seeks to Add Oversight of Paulson's Asset-Purchasing Plan
The battle rages on....Monday should be an interesting day on Wall Street. Perhaps we will all know the new rules come sun up tomorrow.
Any agreements which seek to nullify the powers of recourse to the courts or oversight should be illegal.
Many usurious credit card agreements as well as this legislation would be in trouble.
Phrases like this are unconstitutional because an act of Congress can not rewrite the Constitution. Any clause attempting to usurp constitutionally assigned judicial jurisdiction of the act or actions pursuant to the act is unconstitutional per Marbury v Madison (link to Wiki), 5 U.S. 137 (1803) (link to decision).
Dave - In my experience of 35 cheap lies from judges Truman, MacDuff and McKenna, 35-0 against the unrepresented defendant, chance probability 1 in 3.4 billion, not a single genuine fault shown in any of the six separate defences, and all nicely secretised by various draconian rules, it's the UK courts that should be illegal. ECtHR application 5604/08. And a great many others have come to the same conclusion before me.
A quick report from ASPO, as the conference is about to kick off. I just had lunch with Heading Out, Gail, Jeff Vail, JoulesBurn, and Jim Kunstler. Nice to finally put names with faces. Lunch conversation focused on the bailout, and the expected fallout.
Jim wanted to know why there haven't been indictments over some of this. Good question. Or perhaps it is just incredible incompetence, and doesn't rise to the level of criminal behavior (although it should, given the price we are going to have to pay).
Because all TPTB are involved in the same kickback system?
They just had a look at Biden on CNN. Turns out he has been involved and had payments from the credit card companies for years, with BOA being based in Delaware and one of his sons an ex-lobbyist for them and now an executive.
Perhaps it is not too cynical to suspect that he will not be too hard on the banking system.
Then there are the Republicans.......
They own McCain, Obama, pretty well the whole shebang at this point.
It's like asking why there haven't been indictments in the Mexican police, aside from a few scapegoats for show. The simple answer is that the entire system is corrupt and the rare exception is the honest politician.
A friend of mine was in India being transported by a rickshaw type taxi and the driver had just paid a bribe to a policeman for some reason or other. My friend asked him about the corruption, since bribery at a local level doesn't seem so common in the US. He got the answer that the system in India is more egalitarian as everyone from top to bottom gets a share of 'squeeze' in the bribery process, whereas in the US, it is mostly the bigwigs that get the 'squeeze.' Kind of makes sense in a way.
Robert, really glad to hear that a few of you - our 'doomer gurus' (meant with the utmost of affection) - were able to get together over lunch. No doubt quite the conversation and no shortage of things to talk about.
Learn much, discuss plenty, and please keep us posted.
All the best to you all.
"Jim wanted to know why there haven't been indictments over some of this"
I can't figure out Mr Kunstler when he makes comments like this. Is he being extremely naive or just rhetorical? Hank Poulson used to be Chief Exec of Goldman Sachs. Do we need to look any further? Mr Kunstler is supposed to be full of insight - he abounds with moral outrage, insight not so much.
I suspect it was largely a rhetorical 'wanting to know.' I'm sure he is fully aware of the depth and breadth of corruption in the financial industry.
Because the US public is stupid.
"Stupid" is a first order approximation.
At the next level of detail we are all brain washed.
1. We believe in benevolent invisible hands and muscular fundamentals (ones that can be "strong" as opposed to weak).
2. We believe in some of us making the ultimate sacrifice because "country comes first" (-Palin, circa 2008) and others of us not making any sacrifice at all because they deserve one bailout after the next for one f__ up (Savings & Loans) after the next. You see, ours is an equal opportunity society --all opportunities are equal but negative ones (ultimate sacrifice) are for the lowly while positive ones (bailouts, heckuva job Brownie) are for the higher ups.
3. We believe our government is by "the people" and for "the people".
At the very least, there is clear and overwhelming evidence of massive breaches of fiduciary duty, which should lead to the mother of all class action lawsuits being filed - unless there is language inserted into this bailout bill to shield the perps (which wouldn't surprise me one bit, unfortunately).
Denninger goes over this-the bill as written by Paulson gives the perps the authority to do anything they want, legal or illegal.
Oh, eventually, a small handful of scapegoats will be sacrificed before a ravening horde and sent to jail.
But let's not forget that the underlying policies of the last several decades, which steadily escalated to create this mess, were immensely popular. What could be more appealing to modern addled political sensibilities, especially of "reporters" and the campus Marxists who mold them, than the notion that anyone and everyone, irrespective of capacity to pay, is "entitled" to "own" a gargantuan "home"? Over time the irresistible political pressure to make "housing" ever "fairer" by discarding ever more criteria did its corrosive work and brought us to our current pass - in much the same manner as we have come to embrace the notion that the stupid and shiftless have every possible "human right" to automatic "A" grades and diplomas from our worthless lying "schools", because "it's only 'fair'".
So let's see, liar loan, interest-only, pay the mortgage out of the assumed appreciation in value. Free ride - just like "school". But in the real world where houses don't magically form from thin air, who was to build the houses and supporting infrastructure? The vast army who got scads of "A" grades, yet can't even find the buttons to add 2+2, much less actually do the addition themselves, much less identify the end of the hammer that is supposed to pound the nail? Oh, wait, as long as the Ponzi scheme was still on its way up, it didn't matter, Scotty could just beam all the goodies over from China, with nothing returned in trade.
So now the taxpayer will get whacked into unconsciousness to bail out all these bloodsucking parasites and give them free houses, and then get whacked into a coma to bail out their eager enablers in the so-called "elite". Yes, folks, the Savings and Loan Bailout expanded approximately to the size of Jupiter. Lovely.
And we're shocked, just shocked mind you, that amidst all this heartfelt entitlement on the part of the drones of society, amidst an unending series of expanding bailouts of non-contributors, why, the savings rate is negative. And in even greater fits of delusion, we fantasize about discarding and rebuilding the physical infrastructure of society, installing complicated expensive alternative-energy systems, replacing freeways with train systems, and so on...with the financing from negative savings and the work done by Marching Morons who can't even add???
Hah! Third World, here we come.
+1 for the Marching Morons reference.
Hello TODers,
I wonder if Bill has been reading TOD regularly:
http://blogs.barrons.com/stockstowatchtoday/2008/09/19/ex-prez-clinton-d...
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Ex Prez Clinton Dissects Economy to Packed Ballroom
“It’s the economy stupid,” is the message that helped Bill Clinton beat incumbent George H.W. Bush in the ’92 election.
...During his 25-minute speech, which precedes next week’s annual Clinton Global Initiative, where heads of states and corporate executives will mingle, Clinton spoke of the urgency of alternative energy in the U.S. He mentioned solar power, in particular, as well as the need to retrofit public housing in places like New York City to reduce utility bills and carbon emissions.
[Key Sentence that I wish to emphasize below]
Clinton wants to “close every landfill in every major city,” he declared, and to use that compost as fertilizer or to generate electricity.
------------------------
IMO, it seems that he understands the basic TOD & ASPO concept: "It's not the size of the reserves--It's the postPeak shrinking flowrates, Stupid!
If he understands the Hubbert Downslope, ERoEI, and WT's ELM effects upon Peak Everything: then it is only logical that he also understands the future problems with I-NPK flowrates, thus the need to ramp O-NPK recycling-- his advocacy for closing of landfills.
Perhaps he [and others?] are also pondering Optimal Overshoot Decline, Asimov's Foundations for predictive collapse and directed decline, and the Porridge Principle of Metered Decline. Time will tell...
In related NPK news:
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSLL...
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FRANKFURT, Sept 21 (Reuters) - German fertiliser maker K+S (SDFG.DE: Quote, Profile, Research, Stock Buzz), which will enter Germany's DAX .GDAXI bluechip index on Monday, seeks to expand with a partner abroad, its chief executive told Frankfurter Allgemeine Sonntagszeitung.
The German company will with "a high probability" expand outside Germany with a third party as potash reserves in Germany will from today's perspective only last another 40 years, Chief Executive Norbert Steiner said, according to the German weekly paper.
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If the Hubbert Downslope really hammers home: these reserves will last much longer than forty years because the flowrate will drastically shrink. Recall that these mines were originally hand-labor only, and severe FF-depletion will eventually get us back to pick, shovel, and wheelbarrow unless we plan ahead. We don't want to go back to the earlier method of burning every tree to make potash [Newbies, please Google First US Patent].
From a strategic viewpoint: I wonder when Germany will again shutoff potash exports as they did earlier in 1914? Others may feel free to disagree, but I still think it partially contributed to the US entering WWI. $14,500/inflation-adjusted ton could bankrupt any country given sufficient time. If this had resulted in a national Liebig Minimum--the collapse of food surpluses would have eventually led to the collapse of job specialization. My feeble two cents, but remember the warnings of Borlaug and Bill Doyle [POT's Topdog] that I have posted earlier.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast
Former president Bill Clinton became aware of peak oil after his term.
Drum Beat: June 23, 2006: President Clinton raises the alarm about oil depletion
In spite of his knowledge Mrs. Clinton still made stupid proposals, like a gas tax holiday, about how to deal with high gasoline prices. There is not much hope when the politicians make all the wrong decisions.
Hello TODers,
http://latimesblogs.latimes.com/presidentbush/2008/09/busted-dick-che.html
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Dick Cheney can't toss records, says court
Vice President Dick Cheney has a passion for secrecy.
He went to court to protect details about the role of energy executives in private meetings he led to develop the Bush administration's national energy strategy.
Now he's gone to court again to argue that a vice president need only preserve records central to his job as the official who presides over the U.S. Senate or relating to specific tasks assigned by the president. That would narrow the pile considerably.
---------------------
My guess is that by the times the minutes of these meetings are released years or decades from now, it will be far too late. Bush, Cheney, and the others will be long dead.
Hello TODers,
http://www.chron.com/disp/story.mpl/editorial/outlook/6012631.html
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Our newest Cuban dilemma
Devastated by 4 hurricanes, it could unleash a mass migration in weeks
----------------
Recall that I discussed Cuba & Haiti earlier: glad to see the MSM finally catching up.
the last bailout ? hell no, peak looting !
It seems that 97% of LIRR (Long Island Rail Road) retirees (many of them early retirees) are on Federal Disability, & get get free Golf as part of the package.
http://www.nytimes.com/2008/09/21/nyregion/21lirr.html?hp
In addition to federal disability payments, this business also gets 500 million dollars in annual tax-payer subsidies. And there is another fare increase coming.
Just wanted to mention that last night we went to an E-Town radio taping where James Kunstler gave an abbreviated summary of the basic facts about Peak Oil, in between Joan Baez and others singing. When the interviewer asked how people could learn more about Peak Oil, Kunstler suggested www.theoildrum.com and praised the quality of the site.
(My wife later complained to Kunstler that I spend time surfing peak oil sites instead of generating billable hours by writing building energy modeling software {guilty as charged})
Hello TODers,
It would seem that McCain hasn't studied TOD yet:
http://afp.google.com/article/ALeqM5hRpesMQ_aiIY77blHSI54SSLpVmA
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McCain ridiculed over 13 car fleet
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Doesn't seem like WT's ELP suggestions have gained any foothold in the McCain family. With an adopted daughter from Bangladesh-- you think they would understand the need to have a small ecological footprint.
If TOD ever gets studied by the Palin family: I wonder if the 'First Dude' would voluntarily give up racing his snowmachine to shrink his footprint, and show his concern for the ecosystem and depleting FFs?
Hello TODers,
Recall my earlier posts on Nepal, plus a brief google will show that things are continuing to degrade. It would seem a little Peak Outreach would go far to change these religious Nepalese from wasteful animal sacrifice to a more "political" human sacrifice of their misguided political leadership:
http://www.nepalnews.net/story/409183
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Nepal capital caught up in religious rage
Large parts of the Nepali capital were closed down on Sunday following clashes between police and protestors demonstrating against a government decision not to finance traditional animal sacrifice.
Thousands of protestors, mostly from the Newar community, considered the original inhabitants of Kathmandu Valley, forced shops, schools and main markets to shut down and prevented transport from operating in the old city area.
Demonstrators vandalized cars, burnt tyres and set up road blocks before clashing with police in several parts of the city....
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http://dieoff.com/page181.htm
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REQUIEM by Jay Hanson
...It really will be back to the good old days! Shouts of "BRING ME HIS HEAD" will ring through the land, slaves, scalps, souvenirs and trophies of all sorts, ... exciting possibilities limited only by our ingenuity....
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Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
This might have already been posted, but now the grifters are proposing that the USA taxpayer reimburse them for all bad loans written (plus the juicy slice on top for Paulson's cronies to administer the program) http://www.bloomberg.com/apps/news?pid=20601087&sid=aYXtwpG9mw9g&refer=home
Besides being on the hook for more and more, US citizens should be relieved to know that what they are on the hook for is worth less and less.
Surprise!! Dollar is plummeting.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aWEV62hBpIQ4
What will this do to oil prices?
Stay tuned folks. The next few days will prove interesting.
Even if everything goes Paulson and Bush's way, there is another key factor at work: the law of unintended consequences. Old man Murphy, of Murphy's law fame, will have no doubt the last word.
Well oil will rise to be sure. Thank god this is not the spring or summer or there would be hell to pay, for now hell is delayed a few months.
Of course the U.S. dollar is devaluing. Why do you think the dollar magically began rising in value while crude oil declined in July 2008 and continued defying all of the interruptions in crude oil production from the fire in the BTC pipeline, the war in Georgia, rebel attacks in Nigeria and two hurricanes in the Gulf of Mexico? The market was being manipulated to soften the economic blow from this proposed bailout.
Hello TODers,
Interesting review of a film called DOOMSDAY by a Zimbabwean critic.
IMO, either he doesn't know about Easter Island, Ebola, Smallpox, truly desperate resource shortages, etc, or else he just went into denial as it hits too close to the Zimbabwean bone. The 'marrow' of the film is exposed below:
http://www.thetimes.co.za/PrintEdition/Article.aspx?id=829005
---------------------
Film is a four-letter word
..This week I am using my column to discuss a movie because the film, Doomsday, is quite possibly the worst and most offensive film ever made. You would have to go into minus double-digits to reach an appropriate rating.
I consider it a public service to alert people to the film’s cannibal barbecue in which a man is grilled alive, after which his executioner-chef serves him up in piping-hot slices that seemed, perhaps, a little too rare for my taste.
The film begins with an act of blatant theft. The plot, to use a term that it scarcely deserves, shows Scotland falling victim to a monstrous plague which strikes down people, covering them in loathsome pustules that conveniently burst so that the contagion can spread. After that, the people die, covered in pus and choking to death on their own contaminated blood...
-------------------------------
For newbies:
google Richard Preston + Bioweaponeers
http://en.wikipedia.org/wiki/Cannibalism
Actually he's a white South African (it's a syndicated piece), and I don't think you can read anything more into this than the usual "Some people like watching horror films and some people just don't".
FWIW, I thought Doomsday was reasonably good in terms of filming (particularly as it was filmed on a UK film budget not an American blockbuster budget) and soundtrack, but fell into the usual cliche that hard circumstances will lead to people creating imaginative, convoluted and above all "exposition heavy" pseudo-religious viewpoints. (And Rhona Mitra is pretty to look at, even if the acting is so-so.)
Well, I'm sure Zibabweans read South African newspapers when they can get them, and certainly this movie critic has done them a service by keeping them from spending their rapidly-inflating money on a movie that shows them things they will see for free out their own front window in the very near future.
I agree with the person who pointed out that the hysteria about the economic problems is the same as the hysteria around passing the Patriot Act, or going to war with Iraq.
I encourage everyone to step back for a minute.
Who is suffering here? Where is the suffering? Who is going to bed hungry tonight? This hysteria is all about 1 and 0's on a harddrive somewhere. However, some of the actions being proposed are certain to cause real suffering in the form reduced critical government programs, and taxes and debt that someone, at some point, has to pay.
The real estate behind this mess still stands. The reality of that doesn't change. I hope someone in Congress has the gonads to stand up and stop the madness. Close the markets for a week. They were closed after 9/11 and no one s-u-f-f-e-r-e-d from it. Debate the proposals. Understand what we are doing, before going off will nilly and cratering both our economic system and our children's economic system.
Fire Paulson, fire Bernanke. Get people who really understand the situation in to the positions of power.
Stop this game, now.
Let's consider one more thing though:
Exponential Growth of the Numbers involved.
"A million here, a million there, and soon you're talking real money," that used to be the saying.
Then it evolved to: "A billion here, a billion there, and soon you're talking substantial buckaroos."
But now we have scaled to new heights:
"A trillion here, a trillion there, and soon you're talking Depression size indebtedness."
The hysteria is not as overblown as the change in order of magnitude.
Well, they worked all weekend and are still churning out the changes at this late hour. What will we find when we awake here in the US Monday morning?
Perhaps a brave, new world?
Fed Allows Goldman, Morgan Stanley to Become Banks (Update1)
"O wonder!
How many goodly creatures are there here!
How beauteous mankind is!
O brave new world
That hath such people in't!"
It is quite clear that the intention is to pump money into a substantially unreformed system, save perhaps for a bit of window dressing.
In fact, the fundamentals will be even worse, much worse.
This legislation proposes allowing investment banks to open depositors accounts, for God's sake!
That means that you can open a checking account, and the money will be employed for the riskiest investments imaginable, whilst being protected against loss by the taxpayer!
Meanwhile the financing for the banking system will move from being normally accountable, and subject to law, to a legally entirely unaccountable system, controlled by the whim and fiat of unelected banker's representatives.
Regarding Dettinger's critique, whilst his criticisms of the proposals are sound, unfortunately his suggested remedies are, if it were possible, worse than Paulson's!
He asserts that liquidity is adequate, and then goes on to suggest that gearing of finance should be reduced to 12:1 over a 6 month period.
The only way the institutions could do this would be by calling in all the loans they possibly can and refusing to lend any money at all for any purpose.
This is train wreck territory, and unfortunately likely to lead to his letter being binned rather than studied.
Large amounts of new liquidity need to be released, but it is not sensible to do it through institutions which essentially have been engaged in a pyramid selling scheme on house prices.
If someone came up to you in the street and suggested that you should buy a lot of duff paper at anything lie face value, then it would be obvious that it is a scam.
Just because it is taxpayer's money does not change it from being a scam.
Distressed assets should be bought at cents on the dollar through new, adequately capitalised institutions, funded by the taxpayer, which would later be sold off.
Much of the money could be raised by a tax on bonuses paid in the finance industry in any institution in any company which goes bust.
Whilst a retrospective tax is not usually desirable, it is far better to charge those who have been intimately involved in the present fiasco than many who were in no way involved via taxation.
A 95% or so tax rate, backdated for 5 years, might be a good place to start.
If they loose their homes and everything they have, good.
"when the going gets tough, the Republicans become socialists": Here
Here I am with my first comment. I hope it follows someone else's comment on the topic as I meant it to.
I have been following the discussions here for months, because they are informative and involve many knowledgeable people. I have been very concerned about Peak Oil, but not nearly so freaked out as I am presently about the crisis on Wall Street (and beyond). So I followed links from commenters to "The Shock Doctrine", and Milton Friedman (Bernanke, Paulsen, and McCain are huge fans, it appears, but Obama too unfortunately...), and the New York Times and Wall Street Journal pointing out that the bailout is not designed to alleviate the problem we face in the financial markets. And the only story that makes sense to me is that there is no incompetence or hubris at work here. Events follow Milton Friedman's Chicago School so closely as to be uncanny: we've liberalized markets, we're massively transferring wealth from public to private, we're setting up a police state (suppressing dissent (see http://www.fair.org/index.php?page=3604) at the Republican Convention for example) and limiting civil rights. Who indeed could manipulate a whole country so deftly? And yet it's plain to observe, and not unlike Hitler's "Mein Kampf", the plan is all written down and available for anyone to read.
Here are some thoughts I am pondering:
Will there be a November 4th election?
Encouraging a worldwide recession brought about by American financial system collapse and eliminating the American middle class through monstrous bailouts would result in most effective demand destruction for energy use, no?
Just because you're paranoid does not mean they are not out to get you.
Of course there will be elections. It proves that we live in a democracy. However, the choices we get to vote on have been pre-selected, and are not obviously seriously in conflict with each other.
If Mr. Obama would just once say "Torture is wrong" it would make me feel like my vote meant something.
The high costs of living off of borrowed money:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGBXzUuCWbUE&refer=home
Analysts predict the dollar will be "crushed."
RIP!
http://www.independent.co.uk/news/business/comment/stephen-king/article9...
BTW, just spotted Rainsong's comment above.
It may be that devaluation of the dollar and consequent rises in interests rates will dwarf the alleged positive effects of the chums of Paulson bail out - the hit on the financial standing of the US may overwhelm it, taking on so much worthless paper ruining the US credit rating.
This fraud is big -basically a 700 billion dollar scam that can be increased at will, but everyone seems to forget that the current unfunded liabilities of the USA federal guv stand at just under 100 trillion, or approx 800000 per household. This doesn't help, but the USA was bankrupt long before this latest scam.
AFAIK, although I am no financial expert, that is not true, or at least needs seriously modifying.
'Real' money is that owed to creditors abroad, as they can cut goods off when they don't get paid. That is the money which is in the US national debt.
Money owed to it's own citizens is in a different ball-game, as two paths can be followed, either simply re-legislate to say that, for instance, commitments to Medicare and pensions will not be fulfilled, or simply inflate the worth of those commitments away, so that your pension buys a peanut.
To the extent that the 'future of our children' has been mortgaged, that is only true for external debt, as if the US credit rating is destroyed it will be difficult to buy, for instance, oil as they will want what is owed to them paid first.
The old folk who have attempted to mortgage their children's future by voting for future payments which are not funded, will simply find themselves disappointed as they starve on the streets.
Goldman Sacks, Merril Lynch, Lehman Brothers and the list goes on an on, all were acting like hedge funds.
Now that the music stops and they are left standing,
the FED bails em out and buys them a chair...not any
old chair mind you. A chair on the trading floors they already all owned, but a chair at the tax payers feeding tough. Benny Bernanke, Alan Greenspan, Paul Wolfowitz, Henry Paulson, and the list goes on and on,
used their considerable influence to see too it their
tribes brothers who fattened themselves on milk from the teet, now can get drunk from the blood straight from the heart....via the jugular vein.
Literally with a pen stroke they change their names to
another kind of banking institution and viola....the pigs lipstick fools everyone, its not the same pig cause its got lipstick now, right?
I don't really see a pig, I see a 800 LB gorilla that
everyone fears to acknowlegde and he's got untold trillions $ recently and is being promised untold trillions $ in the future...what was once my future and your future.
Not one perp walk will you see anyone take, but you steal a slice of pizza or hang a bad check and see how fast they snap your mug shot and take your paw
prints. The bull on Wallstreet has balls of brass that aint near as cold, large, hard, as what these guys in this cabal have.
http://www.endicatorstaples.com/res/Wall_street_bull.jpg
In brevity..."You get robbed and are then forced to thank your mugger and pay him for the service" but don't allude that he's a thief...nooooo..that would be hate speech!
I wonder if anyone caught what I screamed, but didnt say?....hmmm