DrumBeat: October 5, 2008
Posted by Leanan on October 5, 2008 - 10:11am
Tough times may force saner lifestyle choices
Well, here we are at the beginning of the Not-So-Great Depression. After years of living beyond our means and having too much on our plates, now we will have just enough - if we're lucky.Whether the current economic downturn lasts five years or 20, it will radically alter our lifestyles. Our material culture will be significantly dematerialized.
Meanwhile, the global environmental crisis is building toward a crescendo. Like a gigantic version of the 1930s dustbowls, it is beginning to settle and choke the very basis of our lives and livelihood. Critical resources are rapidly disappearing, and environmental devastation is draining the global economy. The economic and ecological crises are deeply intertwined, and we are about to experience their combined impact.
How can we survive this unique global transition? What will our lives look like if and when we manage to develop a sustainable economy that balances resources and consumption? What steps can we take to achieve happiness and well-being, knowing that most Americans will have fewer material possessions?
Stockmarkets are plunging worldwide and retired people everywhere are watching with great discomfort as the value of their investments decline. Declining retirement incomes and inflating food and fuel prices are placing great stress on the elderly. The current dramatic volatility in the oil price is symptomatic of the tight supply (amplified by speculation and the current financial chaos) and is what one expects as the world peak of oil production is approached.For many of us in the middle of our working careers the state of the stockmarket may not be as immediately worrying. However, the Australia of 2020 and beyond into which we will “retire” will be a very, very different place from 2008.
36 Opportunities for the Beginning of the Bull
Fundamental arguments that are being made today are completely opposite to those made by the same people just two or three weeks ago. Take the peak oil theory, for instance. Analysts who pushed that particular story are now saying the world has too much oil for the present state of the economy.
Battle for business begins as military hostilities in Iraq take peaceful turn
A fall in the number of attacks across Iraq has emboldened a growing list of companies, including ArcelorMittal, Royal Dutch Shell and Cairn Energy, to explore opportunities in the resources-rich country for the first time since the invasion.Southern Iraq, where British forces have been based since 2003, is an area of particular interest, sitting on one of the world’s biggest oil and gas reserves. It also has a strong industrial and agricultural base and the country’s only port.
Crude shipments from Georgian port plunge
Tbilisi: Georgia's Black Sea port of Batumi shipped less oil in August and September with damage to a railway line carrying oil in fighting with Russia being a factor in the drop, a source at the terminal has said.
Fewer luxury cars, whiskey-fueled parties in future for Venezuela's state employees
CARACAS, Venezuela (AP) _ Bureaucrats in oil-rich Venezuela can look forward to fewer expensive SUVs, top-of-the-line mobile telephones and whiskey-fueled parties next year.Finance Minister Ali Rodriguez said Sunday that Venezuela's 2009 budget "will have significant restrictions" compared to this year's US$63.9 billion plan as President Hugo Chavez's government keeps a close watch on slumping international oil prices.
Reactor shortage to sour India's nuclear dream
In the 1980s, there were about 400 nuclear suppliers and 900 nuclear-certified companies in the US. These have shrunk to fewer than 80 suppliers and 200 certifications.The euphoria of the nuclear deal will soon die down and it will be time to deliver on the promise to supply electricity. The crucial problem of supply of uranium is said to have been resolved, but little has been said about the shortage of critical components for building new nuclear reactors worldwide. The problem starts with the heart itself — the reactor.
Receding Horizons for Alternative Energy Supplies
When energy optimists tout the huge supply of oil that is still available to us in the form of tar sands and oil shale, they forget to mention that costs are rising so quickly for producing that oil that these alternative sources may prove to be of limited value. The same cost problems are occurring in the renewable energy field as well. What is behind this phenomenon sometimes referred to as the problem of receding horizons?Those who claim that we will have plenty of energy and perhaps enough oil for a hundred years or more have so far failed to understand why the rising price of oil is making it more difficult both to extract new sources of oil and to deploy renewable energy from wind and solar.
BP Solar Nixes Factory Expansion: Proof of Industry Oversupply?
BP Solar (a subsidiary of energy giant BP) has canceled a $97 million plan to expand manufacturing in Maryland, citing an increasingly intense competition in the global market.
Algerian minister rules out Algeria to be affected by current financial crisis
ALGIERS (KUNA) -- Algerian Minister of Energy and Mines and current Chairman of the Organization of Petroleum Exporting Countries (OPEC) Chakib Khalil ruled out on Sunday that the cartel would be affected by the current global financial crisis, at least in the short term.
Boomtown of Dubai Feels Effects of Global Crisis
But as recession looms in the West, cracks are appearing in the oil-fueled boom that has made Dubai, with its futuristic skyscrapers on the turquoise waters of the Persian Gulf, a global byword for unfettered growth.Banks are reining in lending, casting a pall over corporate finance and building plans. Oil prices have been dropping. Stock markets across the region have been falling since June. After insisting for days that the oil-rich Persian Gulf region was fully “insulated” from financial troubles abroad, the Emirates’ Central Bank made about $13.6 billion available on Sept. 22 to ease credit problems, in an echo of bailout measures in the United States. Already, some bankers are saying it is not enough.
Pentagon Hands Iraq Oil Deal to Shell
The fact that the U.S. government secretly facilitated dealings between Shell and the Iraqi Oil Ministry for no-bid contracts; that the U.S. military — the primary occupation force in Iraq — regularly pays Shell billions of dollars each year; that on the heals of a contract worth hundred of millions of dollars with the U.S. military, Shell just inked a deal with the with occupied Iraq and set up an office in the U.S. military’s secure “Green Zone” should raise myriad questions about the tangled relationship between the major players in Iraq. These complex issues go ignored because they are viewed as so routine as not to be worth mentioning, but in any other context the confluence of guns, oil and billions of dollars would certainly raise eyebrows.
Nigerian oil rebels release 19 hostages
LAGOS (AFP) - Militants behind a recent "oil war" in Nigeria's Delta region on Sunday freed 19 local hostages but said they were detaining two Britons and a Ukrainian "for security reasons"."The Nigerian hostages rescued from pirates by the Movement for the Emancipation of the Niger Delta have been released in Rivers state," MEND said in an email statement to the media on Sunday.
ConocoPhillips, Abu Dhabi win Kazakh oil rights
DUBAI, United Arab Emirates: Abu Dhabi's Mubadala and U.S. oil giant ConocoPhillips say they have signed a deal with Kazakhstan's national oil company to drill in a potentially lucrative oil and gas region in the Caspian Sea.
Q&A: Why gasoline supplies went south
The frustration of finding and queuing up for gasoline left metro Atlantans with a lot of questions in the past few weeks. Here are some answers.
AP Investigation: Ike's environmental damage apparent as storm hit pipelines, oil platforms
WASHINGTON (AP) _ Hurricane Ike's winds and massive waves destroyed oil platforms, tossed storage tanks and punctured pipelines. The environmental damage only now is becoming apparent: At least a half million gallons of crude oil spilled into the Gulf of Mexico and the marshes, bayous and bays of Louisiana and Texas, according to an analysis of federal data by The Associated Press.In the days before and after the deadly storm, companies and residents reported at least 448 releases of oil, gasoline and dozens of other substances into the air and water and onto the ground in Louisiana and Texas. The hardest hit places were industrial centers near Houston and Port Arthur, Texas, as well as oil production facilities off Louisiana's coast, according to the AP's analysis.
"We are dealing with a multitude of different types of pollution here ... everything from diesel in the water to gasoline to things like household chemicals," said Larry Chambers, a petty officer with the U.S. Coast Guard Command Center in Pasadena, Texas.
Gulf Coast damage from hurricanes nearly a month ago has subsided, but consumers almost a thousand miles away in Knoxville are still reeling from fluctuating gasoline prices and short supply. As the costs they're counting grow, their frustration does, too, and many are demanding explanations.Prices have dropped to below-hurricane levels but intermittent outages at reliable retailers around the area continue to spook motorists, who increasingly are driving to more than one location to find gas. Businesses that depend on gas or diesel for delivering products and services also are tallying the expense.
Only one inspector from the state Department of Agriculture is now assigned to check price scanners, package weights and deli counter scales at hundreds of full-service groceries around the state, a department program manager told The Flint Journal.The drop of more than 90 percent in that enforcement area -- from a staff of 12 just seven years ago -- is an unintended consequence of of sharply rising customer complaints about gas stations.
Food is short, lines are longer
Those who feed the hungry have been watching the numbers grow for months – the lines for assistance stretching longer and pantry and warehouse inventories shrinking smaller. For those at the bottom of the economic heap, it’s long past the point of urgency.“This is probably one of the most generous communities anywhere, but there is a desperate need right now,” said Jane Avery, executive director of Community Harvest Food Bank, “I’ve never used words like ‘desperate’ and ‘crisis,’ but I’m using them now. … For the first time in my 12 years here, I’m scared.”
Fire officials sound alert on heating season
In the late 1970s and early 1980s, oil prices soared amid an energy crisis. Predictably, there was a surge in the number of people turning to alternative means - such as electric space heaters and wood stoves - to warm their homes.And, predictably, there was a surge in house fires and deaths.
Fast forward a quarter of a century to a time of soaring oil prices amid an energy crisis. With good reason, fire officials worry that history is about to repeat itself.
Can South Africa Afford to Bailout Zimbabwe?
"These guys are busy arguing over cabinet positions while Rome is burning. I don't think they realise how big their problem is. Unless the big financiers come to the party, SA is not in a position to afford the financial aid needed by Zimbabwe. At this stage there are very few countries that can help," said Abedian.Abedian believes that Zimbabwe requires at least a seven-year multi-billion-dollar balance of payments support package underwritten by the world's richest economies. The money could help it bolster its depleted foreign currency reserves that have contributed to the meltdown of the Zimbabwean economy.
Without the foreign exchange the country cannot import fuel, food supplies, seed crop, fertilisers, capital equipment and spare parts for its industrial sector.
Proposed development would promote local foods
A Toronto developer is proposing a unique agricultural community for East Zorra-Tavistock that would promote Ontario's buy local, buy fresh project."The whole idea ... is the development of a community based on agriculture opposed to residential," said Uri Salmona, a partner at Salmona Tregunno Development Consultants. "The thrust is to keep it agriculture, but in a different form."
Speaking to council Wednesday, Salmona said the development would include an equestrian, aquatic and orchard community to support various organic crops year round.
The community would also have its own farmers market, education centre and trail system.
Russia's bid to control Caspian energy
RUSSIA'S INVASION of Georgia in August inflicted a potentially severe blow to global energy security by threatening export routes for Caspian energy. Russian President Medvedev's declaration on Aug. 31 that Moscow has "privileged interests" - read, a sphere of influence - in bordering countries underscores that Moscow's aims stretch beyond Georgia. Among the targets are the major producers of Caspian energy - Azerbaijan, Kazakhstan, and Turkmenistan.Russia seeks a de facto veto over Caspian energy. This is important because the Caspian Basin holds some of the largest reserves of conventional oil and gas in the world after the Persian Gulf and Siberia. Moreover, Georgia is a pivot of the "new Silk Road," a vital link to world export markets avoiding Russia's control.
US not vying with Russia over Central Asia - Rice
ASTANA (Reuters) - The United States is not trying to poach Russia's allies in Central Asia, Secretary of State Condoleezza Rice said on Sunday during a visit to oil-rich Kazakhstan.Moscow is sensitive to visits by top U.S. officials to its neighbours in the region, and has in the past accused Western nations of trying to lure away its allies.
Marrying energy demand and supply
"We have moved into a new energy world. The volatility of the global oil price has had a major impact on the world economy at the same time as we are obliged to make major cuts in CO2. It no longer makes sense to have one department responsible for energy demand and another for energy supply."This is how a senior UK government insider explained the widely praised decision on Friday to create a new Department for Energy and Climate.
OPEC chief says will seek to balance market - paper
ALGIERS (Reuters) - Supply and demand alone will set oil prices in coming months and OPEC will seek to balance the market at its December meeting after recent declines, OPEC President Chakib Khelil said in remarks published on Sunday.Prices had recently fallen from levels created by "perverse" speculative practices, Algerian government newspaper El Moudjahid quoted him as saying.
UAE firms start pumping Kurdish gas over Iraq objections
DUBAI (AFP) - United Arab Emirates-based firms Dana Gas PJSC and Crescent Petroleum announced on Saturday that they had begun producing gas under a deal with Iraq's autonomous Kurdish region over Baghdad's objections.
Saudis extend Jazan refinery deadline to 2015
Riyadh: The Jazan refinery in Saudi Arabia is expected to come online in the first quarter of 2015, the Petroleum and Mining Ministry said on Friday, after reports of fresh delays hitting the planned export-oriented refinery.
Correa warns Petrobras over Ecuador oil field
QUITO, Ecuador (AP) - Ecuador's president is threatening to nationalize an Amazon oil field if Brazil's state oil company doesn't hand it over quickly.President Rafael Correa says Petroleo Brasileiro SA has not followed through on a two-week-old deal giving Ecuador's state oil company control of the field.
Tories 'sold to the oil men,' Duceppe charges
MONTREAL — Bloc Québécois leader Gilles Duceppe launched his most aggressive attack to date against the Conservatives and Stephen Harper, saying today that they have been "sold" to the oil industry.Duceppe said it was worse to have a Conservative majority in the House of Commons than a minority government that is inherently unstable, even in a time of economic crisis.
Economic storm fuels homeowners' worries
Rising oil costs, dependence on foreign countries for petroleum, an economy in disarray, and the bitter bite of the encroaching winter may make warmth harder to come by than ever before.Mina, executive director of Massachusetts 211, a nonprofit headquartered in Framingham, fears the dire potential of escalating heating costs this year.
Feds should boost support for CDTA and other bus services
A couple of announcements by the Capital District Transportation Authority in the last week — that it plans to raise fares, and delay a planned expansion of service in Saratoga County — are troubling to anyone who believes in public transit. At a time when ridership is rising dramatically, the last thing you want to do is take actions that will discourage use. Unfortunately, thanks to the run-up in fuel prices (the same factor that has driven the increase in ridership), the authority is facing a $9 million budget gap, which it needs the fare hike to plug. It wants to go from the current $1 to $1.50 in May, and $2 in 2010.This situation isn’t unique to CDTA; it’s occurring all over the country. Which makes it a national problem — as well as an opportunity.
Financial crisis darkens outlook for climate
Wall Street's sickness and its contagiousness for the world economy are bad news for the already faltering effort to craft a new pact to tackle climate change.Tighter budgets, shrinking corporate profits and worries about jobs could crimp manoeuvring room at upcoming UN talks on toughening curbs on greenhouse-gas emissions, sources say.
Gordon Brown urged to pay millions to stop oil firms destroying Amazon rainforest
Rainforest campaigners will this week urge the Government to pay out millions of pounds to stop oil reserves under the Amazon being exploited.
Sinking Tuvalu wants our help as ocean levels rise
THE first nation likely to be overwhelmed by climate change wants Australia to accept its entire population if sea levels continue to rise.Tuvalu, in the South Pacific, is one of the world's lowest-lying nations and faces inundation within a generation by rising tides linked to mankind's impact on the climate.
Climate change threatens to raise the stakes for Iowa farms
If the Earth heats up as climate forecasts suggest, agricultural production is likely to fall in many parts of the world, especially in poor countries near the equator and in Australia, a key producer of grain.But parts of the United States, including Texas and states in the Southeast, also could see smaller harvests because of declines in rainfall. One study estimates that Texas' productive acreage could drop by 20 percent, even with development of more drought-tolerant crops. Advertisement
Economists say that means Iowa and other Midwest states will be more important than ever to global food production.
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Rebuilding Suburban Tyson's Corner
Home to 17,000 and work for 120,000+, 40 million square feet of parking. The key to transformation is 4 DC Metro stations.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/04/AR200810...
Best Hopes,
Alan
In a "rail saturated DC" developed by Ed Tennyson and I (as proof of concept that Urban Rail can be retrofitted to post-WW II sprawl), Tyson's Corner was the terminus for three light rail lines as well as the planned Metro line going on to Dulles.
From memory, the Purple Line would be extended past Bethesda MD to Tyson's Corner, VA. A planned Columbia Pike Light Rail line from the Pentagon/Crystal City would also be extended and terminate at Tyson's Corner and the Virgina Beltway Light Rail line would go from Springfield to Tyson's Corner.
IMO, all plans are well enough advanced that, with funding, all four could be open and operating within 8 years if funding was made available immediately.
Rail Saturated Washington DC
For a complete listing of a "rail saturated" DC (all lines economically justified with $20 oil)
1) Dulles Metro Silver Line to Leesburg - 29 miles $5.6 billion (up from 23 miles as planned today) $5 billion 80,000 AWOT 283,000,000 pax miles annually
2) Purple Light Rail Bethesda to New Carrollton - 15 miles $1.5 billion 70,000 AWOT 105,000,000 pax miles annually
2b) Spur – Silver Springs to Columbia –
2c) Extend past Bethesda to Tyson’s Corner -
3) Columbia Pike - Crystal City-Skyline-Tyson’s Corner – 13 miles $500 million 40,000 AWOT 36,000,000 pax miles annually
4) Capital Cities Light Rail - Shady Grove to Fredrick - 30 miles $1 billion 30,000 AWOT 98,000,000 pax miles annually
5) Centreville Light Rail - Vienna, Mannassas, Dulles - 20 miles $800 million 30,000 AWOT 61,000,000 pax miles annually
6) Richmond Hwy Light Rail - Huntington-Metro-Ft. Belvoir-Springfield Metro- 15 miles $500 million 20,000 AWOT 30,000,000 pax miles annually
7) VA Beltway Light Rail - Springfield-Tyson's Corner - 12 miles $450 million
70,000 AWOT 101,500,000 pax miles annually
8) Anacostia Light Rail - Bolling Field to Minnesota Ave Metro Station - 9 miles $300 million 20,000 AWOT 18,000,000 pax miles annually
9) H Street DC Light Rail - Minnesota Ave to New Jersey & Florida Avenues – 5.5 miles $275 million 30,000 AWOT 27,000,000 pax miles annually
10) Georgetown Subway - Bethesda-Georgetown @ Wisconsin (reroute Red Line for 2 stations and use in section of new subway)- P Street-Union Station – 6.2 +4 miles - $1.8 billion 50,000 AWOT 60,000,000 pax miles annually
10b) 3 station shuttle – Foggy Bottom (Orange & Blue)-M & Wisconsin-P & Wisconsin (Georgetown) Single track
11) Red Light Rail in Baltimore - Charles Center West to Social Security - 8 miles $350 million 30,000 AWOT 36,000,000 pax miles annually
12) Electrify Railroad - Union Station & Landover MD to Richmond - 120 miles $750 million 11,200 AWOT 164,000,000 pax miles annually
13) Extend Baltimore Light Rail Cromwell to Harundale & Marley - $90 million
3,000 AWOT 8,850,000 pax miles annually
14) Wilson Bridge Light Rail - Alexandria to Branch Ave Metro Rail Station – 9 miles $500 million 23,500 AWOT 34,10,000 pax miles annually (if bridge designed for LRT)
15) Charles County Light Rail - Branch Avenue to La Plata MD – 14? Miles $800 million 9,000 AWOT 23,150,000 pax miles annually
Ed also had a list of four projects to avoid, so this is not a "kitchen sink" plan with every possible option included, but one assembled with mature judgment. Raise gas to $9/gallon and those 4 projects might require further scrutiny.
Do the above and what will DC Metro VMT decline to ? Especially in an oil scarce era.
And apply to same approach across the nation.
Best Hopes for fewer VMT,
Alan
These all sound great - in fact one of the 4 stations near Tysons will be walking distance from home. In fact, they have already started the utility relocations that are needed.
Financing is my greatest concern however. A weakening economy, increased costs for the oil that municipalities are using (needed for heating, transportation and also for asphalt) combined together will make it harder to get these done. In the past the Federal Government helped to pay for lots of these sorts of things, but it isn't clear how much will be available in the future..
Right now they have also started construction of HOT lanes in the beltway. High-occupancy toll lanes, done with the help of private financing. It all strikes me as a huge wasted effort.
Continued thanks for this well-thought out advocacy, Alan.
I am a little curious about the negatives these got, and yet I didn't attempt to neutralize them with plusses. I does serve to remind me that there are strong views against what you've been proposing.. and yet if that's what these negatives are about, I'm disappointed that these objectors didn't show up and make their point.
Oh well..
I don't think Alan was downrated because of opposition to rail. I think he was downrated because people are tired of hearing about it.
I think it's more a case of having watched the King Henry Paulson Bailout, Socialism and Welfare for Bankers and Financiers Act of 2008 get passed and realizing the Perfect Storm has arrived, with the first hurricane force winds coming ashore and wondering, "WTH is this guy thinking? Where's the money supposed to come from?"
And maybe a little light rail advocacy fatigue...
Still, I'd not encourage Alan to stop. Were a solution possible (It's not), he'd have the right idea.
Cheers
I love the fact that the actual name is TARP (Troubled Asset Relief Program). Very appropriate, since it's designed to cover up the problem, rather than fix it.
Apparently they did change the name: the original proposal was to call it the Congressional Relief for Assets Program.
Were a solution possible (It's not),
Silver bullet vs. silver BB.
In the real world, it is not "solution/no solution", it is a matter of degree.
We are decades too late for nearly complete mitigation. The issue is what do we do now, since we cannot reverse history.
Public works are a standard gov't response to recessions/depressions. Let us focus then on what will help towards the future.
In a wide variety of scenarios (backed by historical examples) rail and electrified rail will make things "better than they would have otherwise have been".
It is not an issue of BAU, it is a matter of what workable tools we will have to work with to create a new social and economic order.
The more, the sooner, the better.
Best Hopes,
Alan
Don't worry, like I said, you've the right idea for keeping the world as it is, it's just a decade or two too late. The one big issue I have with your plan is that it really does encourage BAU of some form. IMHO, BAU in any form leads back to where we are now eventually. That's not a solution, it's slow suicide.
We have to think not just outside the box, but look for an entirely different box altogether. I think that means small communities connected electronically, autonomous/free regions no larger than current states, etc., etc., etc.
But are present locations the right locations for such a socio-political organizational structure? Many likely are not. Your rail could be the tie that binds, but if it comes first, it will bind us to the present. There's plenty of petroleum for a world not based on it to use judiciously for building something like the rail system you envision later.
Anyway...all this off the top 'o me head. In a hurry to get to the baby and get him in the bath, so... with a grain of salt.
Cheers
Is the perfect the enemy of the good ?
The tunnels and embankments built by Chinese labor for the first Trans-Continental railroad are still in use, but the USA of today is little like the USA of the 1870s.
I took an 1897 subway to ASPO-Boston every day. In 1897, oil was used for lubrication and lighting, but Edison had something that might work better for lighting. Explaining the usefulness of the subway to Peak Oil mitigation would not have made much sense to the builders (how will subways save on lighting ? or lubrication ?)
Yes, some percentage of the new rail infrastructure will be used for just a few decades, but some (most IMHO) will be long lived. That is more than can be said for much of the infrastructure being built today.
Best Hopes for Long Lived infrastructure,
Alan
I wasn't talking about longevity, Alan, but locations.
Cheers
Every post of mine, on any subject, got down rated today. A fan I suppose :-)
Alan
Well in support of your contributions, I'll give a somewhat off-topic comment. I believe you along with others are predicting exodus from suburbs/xburbs. One additional variable in this discussion that very recently occurs to me, and I don't have figures - but it is where the McMansions are - is that a lot of the people who are upside down on their mortgages may live in the burbs. They are, in a financial sense trapped, they can pay their mortgage but if they move they are suddenly 200,000 dollars poorer and perhaps with a negative net worth.
I can almost hear the former Lehman Brothers banker with his house in the Hamptons. "Two weeks ago I was a 'Master of the Universe' making 400,000 dollars a year. Today I am unemployed, my savings (in Lehmans) wiped out, my 1.5 million dollar home worth 1.1 million. If I move I am 300,000 dollars in debt.
Don't know how it factors in, but I suspect many, many people will not wish to leave the suburbs as to do so will involve a "mark-to-market" correction of net worth.
Oh and the Asian Markets have tanked. Sorry. Good luck to all.
PDM
I tend to agree somewhat.
Although Alan's plan is quite feasible and on the surface quite doable it presumes to predict the future and how the populace will react in the terrible times which many also predict is just about on us..
How do we know how major population centres will react. Will they, with their shiny new electric trains and transport systems welcome the countryside with open arms? Look at shanty towns in cities throughout the world. They grew slowly.
Would we be lucky enough to get a orderly progression to that mode of living in major cities? I think it's the best we can expect.
The expectation is, as times get tough, as work is hard to come by and families begin to get hungry, they will move.
They will move back in with families, they will move to where there is an expectation of a better life of simply just a life.
How this migration and exodus takes place is open for conjecture. Building an inviting haven with all the trappings of a lifestyle to be envied, may be asking for trouble.
As I have stated in the past, IMO the time for pro-activity has long passed. We need to conserve our resources and funds to be able to react to the dynamic times ahead.
Will there be welfare, or soup kitchens? At the present time the USA is fed by less than two percent of the population, probably similar to a lot of western countries dependant on technology to support the mode of living they have grown accustomed to.
The proposed expanded and electrified rail systems will be great in a world of BAU but I don't expect that.
In reality, IMO what is about to unfold will in no way be mitigated by any grandiose engineering schemes.
We need to stop thinking that electric trains will be taking business suited gentlemen to the place of nine to five work or families to visit grandma and Disneyland or vacations on the Riviera.
Lets go with what we have, lets see what unfolds and be ready to act and react positively. That's not to say we don't make plans. We have to be prepared to act to fairly predictable scenarios but also be aware that most of what is about to happen will take us by surprise.
The alternative is of course is to build and expend all we have now. We can maybe give the present generation half a chance. The next generation can go @#$% themselves.
Look at shanty towns in cities throughout the world. They grew slowly.
Hoovervilles sprang up in a matter of months/a couple of years. I suspect the same for Shruburbs.
New Orleans still has sugar refineries, coffee roasters, tea packaging, hot sauce bottlers, etc. as well as the port and medical center that once had workers get there by streetcar. We easily could do so again.
Many cities in the USA have plans to build or expand Urban Rail, plans that could start physical construction in 12 to 36 months (see jobs) and be finished in 12 to 42 months (a couple of subways would take longer than that). Why not build them ? And then keep building as long as social organization holds together.
Best Hopes,
Alan
Bandits;
Your opposition to Alan's proposals seems to rest on characterizations that I don't think fit at all with his suggestions.
He says electric light rail, you say 'Shiny new electric trains and transport systems'
He says TOD, or Transit oriented development, and you react with BAU, 'Business suited gentlemen', Disneyland and the Riviera, and the implication that people have to accept the countryside. It's completely out of line with what he is talking about.
TOD means many suburbs and towns would gradually reorganize to take advantage of transportation to get to jobs, to cities or factories, get around the county or the country as really needed. It's pretty much the bare minimum expected of our neighbors in Europe, but Americans treat it like some Fancy Pants notion, maybe because they haven't had any experience with how easy and normal it can be to go to the train station, get a ticket, and read a paper or a book, and get out in the place you needed to get to.
"Lets go with what we have, lets see what unfolds and be ready to act and react positively."
No. Don't just expect to React.. look Ahead! Look at tools that work, and make more of them now. PREact. PREPARE.
'Be Prepared.. That's the BoyScouts' solemn creed. Don't be nervous, don't be flustered, don't be scared. Be Prepared!' Tom Lehrer
Couple of stories on CNN this morning...
The "debt clock" in New York City can't keep up. It "rolled over" ten trillion, and there's not enough digits to show it.
A helicopter pilot reported being shot at by marijuana growers. They showed the holes in the helicopter. He said the reason is the economy. Narcotics producers are suffering just like all the other businesses out there. They're running out of money, so becoming more desperate.
And this story at the Times is an interesting account of the fall of Fannie Mae. It suggests that Fannie was not just a victim of the mortgage crisis - it caused it. And the reason was not only greedy Wall Streeters, but congressmen - especially Democratic congressmen - who wanted more poor Americans to own homes.
Granted the congressmen did a pretty good job of selling the dream along with the 'greedy' bankers, BUT....does the Times honestly believe that people were so stupid that they just completely detatched themselves from reality when it came to figuring out how they could afford a 4 bed mcmansion and SUV when all they did was flip bugers in some sweaty diner?
I'm not so quick as the Times to lay the blame squarely at the feet of the providers and i'm sure that some of those now defaulting knew that there was something fundamentally wrong with what they were doing - just that it was socially acceptable to go ahead anyway.
Marco.
Contrary to the NYT spin, none of this would have been possible without securitization and rating agency corruption (among other areas in the financial sphere). The housing bubble was fraud based, and the MSM places almost all the focus on the fraudulent homebuyer and mortgage broker. Without the jet fuel of securitization and rating agency and financial institution corruption the whole situation would have been miniscule in size. Realistically, if you had to place the blame on one individual a logical choice would be Hank Paulson. One person didn't cause this, but it would be difficult to locate anyone more responsible.
Hey BrianT, didn't you know that when a big corporation goes broke, it's all the janitor's fault?
From top down, bottom up whichever way you look at it it all boils down to greed and modern consumerism/materialism to have bigger, better more of etc...instead of a more sustainable approach to living.
Marco.
Marco, like your comments.
Keep them short and simple and straight to the point. Less room for confusion or misunderstanding.
Hang in there. This is a tough crowd by times but we learn lots from one another. Good to have you aboard. Cheers!
By now, it should be beyond obvious that the NYT is now (and always was) the Charlie McCarthy voice of the elite ventriloquist. At times "liberal" and other times pleading, reasoning, stern or stentorian -- always high minded and literate. And always obscuring enough of the truth to confuse the highbrow readers, while simultaneously tickling their fancy.
WHY DOES ANYONE PAY ATTENTION TO THIS CRAP?
Naturally, this "information" is translated into a more easily understandable form by the next rungs down the "intellectual" ladder (Limbaugh, Hannity, O'Reilly, etc.) so they can numb the masses.
Does anyone ask why suddenly all of the talk shows and right wing blogs have discoverd simultaneously that "Democratic Congressmen" are to blame for the entire mess, through a very simple, easily understood mechanism?
"Democratic congressmen - who wanted more poor Americans to own homes"
Greenspan himself was desperately pushing this in speeches shortly after the dot-com crash - He was recruiting financial cannon fodder for the next Bubble he was blowing.
From the Fed on down the Rules were set such that even the honest bankers were forced to play along - or lose business and talent to competition who "played by the rules."
But most of the honest bankers were also smart enough to immediately sell the crap mortgages to Fannie, and keep the safer mortgages themselves.
Sir Greenspan should be facing trial instead of being knighted.
You're right-Greenspan is the man-he tops Paulson at GS in terms of personal resonsibility for this mess.
No, Sendoilplease.
One gets knighted for assisting in the schemes of the elite world controllers, not for helping the poor.
Greenspan may qualify for a barony, at least.
Widening home ownership was all but a plank of the Republican party in recent years. Home owners are more likely to vote Republcian. It was an explicit plan of Rove's to extend home ownership as far they could extend it. Bush has given innumerable speeches mentioning the "ownership society".
There is plenty of blame to spread around, but very little of it should be given to the people who bought homes they could not afford (note that I'm not talking about house flippers here). We are talking about economically unsophisticated people who were told by every voice of authority -- Democrats, Republicans, the Federal Reserve, the Media -- that they could afford these homes. Very few people have enough confidence in their own judgement to override the unified voice of authority.
Neoliberals and neoconservatives (and their mouthpieces in the MSM) alike had a plan to have a growing economy with depressed wages by substituting credit growth for income growth. Essential to that plan was ever-increasing mortgages on top of ever-increasing home prices. That plan was aggresively propagandized to the prospective home buyer. It was a monumental scam. And, yes, the victim of a scam usually deserves some of the blame. But in this case I think the culpability is overwhelmingly with the ruling elite. Blaming the victims is just blame deflection by scapegoating.
Do you honestly give them so little intelligence as to question their basic abiltiy to pose the question to themselves: can we afford this house and big car?? I sure some of these people do have enough intelligence to make at least that judgement and if they still went ahead it's becasue they chose to stick their head in the sand about the risks - along with the bank/morgage broker. I can understand the broker presenting them with some financial wizardry that lets the mre-finance indefinitely, but surely any rational sane being understands that at some point you have pay up or ship out!
Then again sometimes rational sane behaviour gets brushed aside in the face of greed.
Marco.
You misread what I wrote. It is not a matter of intelligence. It is a matter of people not being confident enough to question authority. Any number of studies have shown that the majority of people are easily swayed by authority figures. We don't teach critical thinking in this country. We don't teach people to have self esteem because of what they have accomplished, we teach them to feel good about themselves because of what other people tell them. You are being naive to cast this as a question of intelligence. It is a question of independent critical thinking, and (by and large) the American people are miserable at it. And they are miserable at it because they have spent their entire lives being trained to be miserable at it by TPTB.
It the ability to do 'individual think' not related to inteligence?
I ask as I really don't know.
i agree with shagrash. there are many forms of intelligence, being good with math is just one of them.
the question is not if the know they can't afford one thing, but if they can make a difference from what matters to them (a normal affordable car), and what matters to their neighbours (shiny new big car). there are many cases when some people assume other people's desires and make them their own.
this starts early, too. just look at teenagers, see them thinking "but everyone else has item x, i must have it too"
it all boils down to this "what's really important to me"
Marco get off your high horse.
People like you in the workforce are a dime a dozen. They have a vast over estimation of their own intelligence and are gifted with the blessing of 20/20 hindsight.
People in the workforce and in life usually make decisions based on the information they have at the time.
That information may be flawed or their interpretation of the information may be flawed but they did not deliberately set out to fail.
They don't need a pissant coming along after the event, with a "holier than thou", condescending attitude.
I think many families which failed, probably had quite intelligent households, probably smarter than you even and I would guess they are fully aware right now, of where they made their mistakes.
Most were presented with a chance to reach a goal they never really thought possible. They were duped by experts, like a magician diverting attention while he hides the ace. Rather than expressing contempt you should at least feel some empathy, (if that is possible with you).
They actually were living a dream based on the world view openly espoused in movies, documentaries and advertising.
Do you remember the phrases you were bombarded with at school? "The world is your oyster", "Live your dream", "Anything is possible, nothing is impossible" and many more you could think of I'm sure.
Maybe you should get a little humble and remember that but for blind luck and chance there goes many more of us.
There might be a new saying in school now "Work hard, live mean, die young and leave a well used corpse".
LOL!. point taken.
Interesting though that 'holier than thou' attitude is going to come from the MAJORITY of Americans who can afford their morgage and did plan financially correctly and see everyone else getting bailed out.
Marco.
Critical reasoning is taught at nonreligious universities, but not in high school.
No, it's taught in very few high schools.
Given the rampant, innumerism (inability to do math/arithmetic) and the fact that affordable is basically a mathematical concept, we should not be surprised that millions were taken in. Besides, only a tiny fraction of people are able to recognize that exponentially rising housing prices, are another type of perpetual motion machine -and hence just a well disguised ponzi scheme. So when sophisticated marketing types, who seem to be much smarter in math/finance then themselves tell them it will work out just great, few are able to resist.
Now admittedly, the genesis of the problem is our disfunction educational system. With so few learning how to think, and how to resist a well rehearsed pitch, it should not be surprising that tragic consequences ensue from time to time.
So we have many things to blame. Poor general thinking skills. Greed. A desire to get something from nothing. Political/economics elites who try to exploit, rather than correct these problems. Now when you get down the the last few years, the Republicans saw that the end of the American dream was at hand, but by cheering on bubble after bubble, they could continue the illusion, and enjoy the fruits of power for a few years longer. The securitisation, and fraud are not the cause of the current problem, but they greatly amplify the ill effects -even for those who were personally able to resist temptation.
I don't know if intelligence is lacking-- I doubt that. There is a major issue of peer pressure, however. We all remember that a day or two after the World Trade Center fell our President told us to "go shopping." People want very badly to do what they think other expect them to do. It isn't greed, it is a different sort of emotion.
"Intelligence" is not a scalar.
consider that a common perception of unused credit on a card is one of, "money to be spent," and that an ability to perform accounting is not innate. If one does not grasp the fundamental difference between debt and income, then learning accounting may not be possible. Moreover, half of the people are, by definition, below average. Perhaps it is for these reasons that the Debt Trap has such a long, well established history. Many people become caught in the trap, they understand at some level that they need to get out of it, but they do not know how to do so. When a person comes along, one who appears to be knowledgeable and is a smooth talker, the financially naive may place their trust in that person. Sadly, there are a lot of crooked people in the world who take advantage of trust.
What is the point in self-immolation?
"... home ownership was all but a plank of the Republican party in recent years."
that is the history i remember as well. but i believe the facists are trying any way they can to lay the blame at the feet of someone else. revisionist history.
damn, i have to hide the computer again, the ministry of truth is banging on the door and i dont think they brought welcome wagon with them.
Shargash,
I've floated back on forth for a while with the blame game. I finally decided that the relative ignorance of the buying public was not relevent. They did not force the money lenders to make mortgages available to high risk lenders. By the mort. co. own measurement standards these folks were high risk and minimal equity players. The companies were also well aware of that the "ever expanding real estate growth" model was also risky. The gov't gets it share of blame by supporting (and requiring at times) all those "fair housing" programs. The borrowers might not have been sophisticated enough to understand the risks but they were not in control: the mortgage lenders were and they deserve 100% of the blame IMO.
Point one: The vast majority of Americans are financially undereducated. Whose fault is that?
Point two: Banks and mortgage brokers were giving away money (HELOC'S) and houses with easy terms and little consideration of credit risk. Whose fault was that?
So one side claims they didn't understand what they were getting into. The other side claims they were taken advantage of. But you know what? Let's say a homebuyer did understand what they were getting into. Can you really fault somebody who makes $35,000/year and has no savings from jumping at the chance to live in a $300,000 house for a few years at a vastly subsidized rent, with the chance that they could come out ahead on the deal? When the downside is that they walk away and take a credit hit? When the person offering the deal is making $250,000/year? I mean seriously, whose fault is that?
As I phrased slightly differently above - what is middle America - ie the part that is (in the main) not having any problems paying the morgage going to make of all of this?
Jealousy that they are not getting any help?
Sympathy for the duped sub-prime group?
Anger at the government?
All of the above?
I realise the concensus reached in this thread is that it is mainly the fault of the lender and the entire capitalist system that encourages this behaviour and I have even been swayed over that way to end up agreeing somewhat, but... at the end of the day the majority of Americans are not defaulting and are still enjoying their nice houses and SUV's! - the ones who have benefited from this system. That said they will surely ALL be paying a bit more tax before this debacle is finished (if it ever does!). Oh almost forgot, more in gasoline costs too.
Marco.
Marco--
Maybe it wasn't a stupid idea. Say you make $35K at a dead-end job managing burger flippers; you get a bank to lend you 100% financing at teaser rates on a $500K house appreciating at 15% a year; you pay interest only with the state and federal government picking up 30% of that; at the end of 2 years you sell the place and pocket $110K after selling costs. You just put more savings in the bank than you would do at your job over the next 30 years. If things go south, they foreclose on the house, you probably live there rent free for 7-8 months after you stop being able to make payments and before they can actually kick you out. Where is the downside to the buyer in any of this? He ends up with a bad credit score? It probably was before. You're not taking advantage of the bank: they're pushing you to lie about your finances so they can qualify you because they know they will securitize the loan and sell it to some suckers overseas. The banks only risk is if they can't sell the paper and the housing market goes down, but everyone has been assured the this time is different and house prices will never again go down so they bank has no risk either. It's a great system.
!!Try sell that to the world economy.....we're ALL screwed now!!
I think there is a bit of stress involved. Especially if you have a family that will all be living in the mother in laws basement:-(
Marco.
In regards to Times story on Fannie Mae, I was traveling up north of Midland, Texas last week and the only three raido stations I could get were Sean Hannity, Rush Limbaugh and Bill O'Reilley. They were all three parroting this same meme--that it was pressure put on Fannie Mae by Democratic congressmen that led to its downfall.
Barry Ritholtz has done some excellent posts in an attempt to debunk all this disinformation coming fom the right-wing echo chamber:
http://bigpicture.typepad.com/comments/2008/10/federal-reserve.html
http://bigpicture.typepad.com/comments/2008/10/its-a-racial-th.html
http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html
Isn't that near Dante's Inferno, TX? What a charming part of America.
Then the article explains how Mudd humiliated and fired his chief risk officer.
Plenty of blame to go around.
The democrats were not about to take the punch bowl away.
It was the housing bubble that did in Fannie and Freddie, speculation, mortgage fraud, and loose credit. Many realtors sold houses that were overpriced regardless of their politcal affiliation. Loan officers on commission tried to give loans to almost anyone. The credit rating agencies may have been negligent also.
We wonder why the Republicans bailed out some distressed investment banks and not others. Was there some sort of illegal conflict of interest going on? How can a Fed chairman give low interest loans to an investment bank without sufficient capital ratios in the first place? The attorney general could not remember the details why these attorneys were allegedly fired for not investigating only Democrat campaign contribution injustices. There are some seeking indictments that might lead back to a source in the White House.
There might be some indictments, if anyone in this wicked Government (bipartisan, remember?) were interested in pursuing them.
It's not the Democrats, not the Republicans. It's a failure of liberalism and enlightenment values generally. Say what? I was at a workshop this weekend on transition towns. We were listing all the cultural values that were destroying those things we cared about. We are our own enemy, as Pogo pointed out, and becoming more efficient at being our own enemy is not going to help us. Neither the Democrats nor the Republicans offer anything relevant. More on this failure of liberalism and enlightenment in a few days - but consider - why would ideologies and cultural values built on increasing prosperity work in a time of decreasing prosperity and energy? Palin is probably right, no point in assigning blame. It's time to stop wasting resources on perpetuating a non-functional world view. Communitarianism, subsidiarity, local, local, local.
cfm in Gray, ME
A geopolitical option
The Central Asian nations feel trapped between two larger powers, Russia and China. If those two agree to a pact (a la Germany and the Soviet Union over Poland), they have no option.
Collectively, the Central Asian nations plus Iran, Turkey and perhaps Pakistan and Afghanistan have enough weight to provide a third option. They are all Moslem (Georgia & Armenia are not), non-Arab and many have oil. There is no "bad blood" strong enough to not forget and none are too big to completely dominate. Turkey has been rejected by the EU. Think EU as the goal (with Mongolia and Pakistan as associate members ?)
They also provide, via Iran, a non-Russian, non-Chinese path to the rest of the world (Iran has plans to extend their rail line into Afghanistan to Tajikistan).
A rapprochement between the USA and Iran could lead this development, with the USA as a de facto "associate member" and useful counterweight to China & Russia.
A fantasy, but one worth thinking about,
Alan
Alan -
Nice idea.
One little problem though:, Iran, Afghanistan, and Pakistan, hate our guts, arguably for some very good reasons. The government of Turkey pretends to be our friend, but we're hardly any more popular among the Turkish people than we are in the other three countries.
No, I think we really blew it big time in that part of the world. Perhaps not permanently, for the foreseeable future. And being perceived as the chief enabler of Israel's oppression of the Palestinian people sure isn't winning any points for the US over there either.
Even if Turkey, Iran, Afghanistan, and Pakistan form something analogous to the EU, we are probably going to be at the top of their shit-list for a long time. Besides, the last thing the US wants is for those countries banning together, as it makes it all that much harder for the US to intimidate any single one of them.
Anyway, I expect to see a pig flying over my house before any of this ever takes place.
Iran is laying the foundations of such a policy already (against US opposition). The main efforts have been "rail diplomacy" (new or upgraded rail links to Azerbaijan, Turkey, Iraq, Afghanistan, Pakistan, Turkmenistan (and from there on to Kazakhstan and China) and plans for Tajikistan plus hydroelectric dams (Tajikistan, Armenia and even Nicaragua and talks with more).
Just be a "good neighbor" and more will develop in time.
Alan
There is a fly in the central asian ointment however. The Sunni/Shia divide is as deep as ever. Sunni's view Shia as apostates. The latter has always felt like an endangered minority. Iran is emerging as the primary Shia power. They may still be able to work together, but it would never be an easy alliance.
The former Soviet Republics are not intensely religious and theology has marginal (if any) influence. Turkey was founded as a secular society, although religion is growing in influence. If Iran moves away from the mullahs (as the population wants to), then the Shia-Shite divide need not be a major issue.
Protestant-Catholic divide once was greater than Shia-Shite but see the EU today.
Such a community would be driven by "apprehension" of Russia and china. Christian Georgia could have a place.
Alan
Much of the FSU is not very religious, but the lands just to the south are. True, following Attaturk, Turkey has maintained a mostly secular government, but the people are overwhelmingly muslim. Of course poverty, and lack of opportunity are highly correlated with growing religiousity, the unwanted masses find acceptance by the fundamentalists, when no-one else wants them. Iran is not going to move away from its current system of government: a supreme leader choosen by a council of ayatollahs, overseeing a democracy. The people fear the chaos of revolution far more than they are inconvenienced by the mullahs. And they still celebrate the overthrow of the hated Shah, and the newly found defiance of foreign influence, that the current system ushered in. It is possible, that if the Russians, and Chinese are heavy handed enough, that that might be sufficient incentive for these quite different nations to band together, but I think if the Russians tred lightly it is not very likely.
Some say this worldwide financial crisis will take the EU apart. Also, I saw a website that claims the Chinese gold reserves are 10x the American reserves.
Maybe Germany and France will be applying to Iran for membership in the Persian Union? History repeats itself.
Alan--The Shanghai Cooperation Organization is the region's attempt at what you're outlining, but it's meant to be an all-Asian Bloc including Russia and China. Japan will be an outlier because Japan has always been an outlier. The real threat from a US foreign policy point-of-view is expansion of the SCO to south and southwest Asia. I trust you've watched the Blood and Oil documentary that showcases the work of Michael Klare and learned something about the contiuity of US Imperial policy toward the Persian Gulf region and the numerous lies and treasure expended by both Dems and Reps to maintain control there, and although not mentioned, how US Israeli policy fits into the whole puzzle.
The biggest mistake the US government has made was allowing the massive offshoring of manufacturing and institution of the debt-based service economy in its place. That decision by Reagan's keepers effectively doomed the Empire. Think for a second of what percentage of components for your rail plan are manufacture in the USA? Is it even possible for the USA to manufacture over 95% of the components domesticly? And what about Green Energy machines?
In pursuit of ever greater profits, the financiers and industrialists destroyed the most powerful country on the planet--that's the real meaning of Post Industrialism.
Think for a second of what percentage of components for your rail plan are manufacture in the USA? Is it even possible for the USA to manufacture over 95% of the components domestically
Easy to get to 95%. Rail and ties are Made in the USA today (weight makes that economic). Some, but not a full selection AFAIK, of switches are Made in the USA. Expanded demand should get a foreign manufacturer to open a full range switch shop here.
Some signals are US, but I am unsure of what %. US signals need an upgrade and that means importing technology. We could stay with old signals, but not economic IMHO.
GE, EMD and Brookville all make locomotives in USA, Bombardier in Canada. GE & Bombardier have made electric locos. I suspect that we could source the power electronics in the USA.
Freight and passenger rail cars are Made in the USA (tank cars in Alexandria Louisiana for one), as are subway cars (Alsthom upstate NY for one) and light rail (Siemens outside Sacramento, etc.)
New Orleans built 31 streetcars in house (I watched it :-) with 96% US content. Oddly, air conditioners (assembled in EU from US components) were the biggest foreign parts (If one does not count the mahogany logs)
Best Hopes,
Alan
Iceland
sinksmelts....Currency down by a third (20% in the last week against the dollar).
Inflation was at 12.5% before this latest plunge. And interest rates were at 15%. In addition, most Icelandic car loans are in foreign currencies. Companies that deal with Iceland won't take the local currency any longer.
The party's over for Iceland, the island that tried to buy the world
Iceland pays price for rapid economic growth as inflation and anxiety heat up
Ironically Iceland is one of the few places on earth that might have a shot at a sustainable energy future due to their low population and abundant geothermal energy. This just shows that our entire civilization is doomed to collapse. There is no hope for any of it.
Iceland's population is pretty high actually compared to the quantity and quality of arable land they have.
But this is hardly a doomsday scenario for Iceland. They will become poorer, however. They have a cohesive society. If everybody's income gets slashed in half (or by 2/3), it won't tear them apart.
In addition, it will be far easier to make their society sustainable after it has abandoned the Range Rovers, BMW's, and Hummer limousines mentioned in the Guardian article. Most of the world's economies are too bloated presently to be converted to renewable power. They will have to become much leaner.
The problem is "leaner" implies loss of capital, which will make it much harder "to be converted to renewable power."
I think the trouble with "leaner" is that it means unemployment in the short term.
But "leaner" can mean preservation of capital....natural resources for instance. And it can mean freeing up capital -- financial and human -- that is currently employed for purposes that have no future and making it available for better ends.
For instance: a lot of new infrastructure was built in the '30s and there were enormous advances in technology. New products based on new tech continued to be rolled out. (Refrigerators, for instance)
A "stalled" economy certainly doesn't mean society is stalled.
The current problems in Iceland and elsewhere show that people can act in incredibly stupid ways. That shouldn't come as a surprise to anyone whose familiar with history.
There are two memes which could collapse civilization:
IMHO, both the cornucopian and doomster memes are copp-outs from hard-headed reality.
We *can't* know the future with any certainty - but a lot of *possibilities* exist for either scenario.
I worry a lot more about human stupidity, ignorance, fear, and greed than about physical limits to energy production.
BTW, I didn't say that any of our options will be easy.
A few more negative Black Swans and the Doomers win.
Let's try an easy one; "We had no idea the methane release in the tundra was as great as the scientists said." We must re-freeze the tundra.
I was specifically talking here about energy production - ie, I see no fundamental reason that we won't be producing energy for centuries.
If the Doomers win and we all die - I don't exactly call that a "win" for anybody.
There are many *Black Swan* events that could end humanity:
And there are many *Black Swan* events that could end my life:
I still walk to the store, take Greyhound buses, and hike in the mountains. You can't plan your life around "Black Swan" events.
WRT the methane release in the Arctic, scientists are constantly finding out all kinds of stuff that they didn't know before. Metlting in the arctic could lead to a positive-feedback loop of increased energy absorbtion leading to further melting. Or, it could lead to increased evaporation triggering the start of a new ice age.
The NY Times reported this morning that sunspot activity is at a 54 year low. Maybe it heralds the start of a new ice age, maybe not.
Lots of things *may* happen. I try to stay focused on things that I can understand and possibly influence. Like, for example, NA supplies of liquid fuels for the coming decades.
If we run out of diesel, most people in NA won't have to worry about AGW anymore (because they will be dead).
Iceland has a national debt that is more than eight times its Gross Domestic Product.
Europe Scrambles to Save Its Banks:
http://biz.yahoo.com/ap/081005/eu_europe_meltdown.html
The Republic of Iceland paid off it's national debt a couple of years ago. They were referring to the Icelandic banks, which have rumored ties to the Russian Mafia (supposedly the source of the massive expansion).
Alan
If they're guaranteeing their banks to the fullest, doesn't that make the bank debt effectively a national debt - just like the bailouts in the USA, only worse?
Yep, and "All 'round the mulberry bush the monkey chased the weasel."
We are watching sovereign governments and central banks scrambling to protect their turfs and in so doing, committing their people and potentially generations unborn to some fairly horrendous liabilities.
Once one player starts jumping the queue, well they all have to jump. Makes for bad blood among cousins and neighbours. Germany's knickers are in a knot over Greeks and Irish late night antics. http://news.bbc.co.uk/2/hi/business/7653317.stm
Hope they're humming out some lively tunes for a wake since it's all over but the crying. Might as well prop the corpse in the corner and dance the jig.
Up and down the city road,
In and out the Eagle,
That’s the way the money goes,
Pop! goes the weasel.
You have described this Depression's version of Smoot/Hawley.
Hmmm... I'm certainly no spokesperson for the "Doomsters", and I guess the folks who are awaiting the Rapture with breathless anticipation might qualify, but I think "doomsterism" as you define it here (ie; to disparage people using big words and scientific concepts intelligently) is less often a meme than the result of analysis. "Cornucopianism" might be usefully considered an emergent property of unfettered delusion, where "doomsterism" (as you describe it) would be emergent from reasonable intelligence combined with a relative lack of delusion.
I agree that human stupidity is an impressive force. And I'd say that effective stupidity is a useful way to look at it. A person who scores 135 on an IQ test but also considers a used-car salesman an authority figure is effectively stupid. The sum total of these misperceptions, illusions and delusions is what causes the aggregate behavior humans and yeast to be similar.
RE the logic in your post, don't you think the discovery of fission is getting rather long in the tooth to be an example of "just in time" stuff we might discover? I'd say that a better definition of "cornucopianism" is the belief that the world and universe must be set up so that there is always something available to be discovered "just in time" which will keep bad things from happening to growing human populations. This meets the test of "effective stupidity".
cheers.
(editing for spelling)
I think you are exactly right that the physical limitations are workable for us as a species. The problem is our basic economic systems are cornucopian in nature - we require constant inflation and interest accumulation and thus an assumption of unlimited exponential growth. There are other economic system to use, but switching from one to another is a huge problem that people are probably unwilling to solve peacefully.
"Can't we all just get along" will work no better now than it did in the 60's, unfortunately.
Promise?
UK: Believe it or not, house prices are going to soar
I'm sure that prices will indeed eventually go up -- as soon as home prices cross below that magic ratio of 2.5X gross income for enough families. Until then, a return to rational lending standards should keep a lid on things. This based on my US experience -- I suppose things could be different across the pond, but I'd not think substantively.
Cheerio -- Billy
A key difference is that, unlike the states, virtually all mortgages in the UK are recourse mortgages so in principle you always owe the amount you took out no matter how prices fall; jingle mail doesn't automatically relieve you of the entire debt here. (In practice in the past some banks have sometimes written off the debt after repossessing the house and getting a substantial lump sum part payment just to get debt on their books, but they don't have to.) Consequently I expect fear to be stronger in the UK: the reason I didn't struggle around to find a mortgage to buy a house was that the potential downside of huge negative equity potentially occurring combined with a career requiring relocation was much more important to me than potential upsides if the housing bubble did keep going.
Now this fear won't last forever, but if house prices keep falling (so far the declines in the UK have been bad but not yet catastrophic for most people) I'd expect enough people will know someone who's been very badly burned and will be doing their sums carefully for a few more years than under the american system. (Whether this is better or worse I don't know.)
Wow -- not being able to burry the debt would certainly make me think just a little harder before signing on the dotted line for a loan I may have trouble repaying. It is a wonder the market got so overheated in the UK. Now here in the land of the free and the home of crushing debt, things are clearly set up to be different.
The British are good at this:
And of course -- we will all get what we want someday:
http://www-groups.dcs.st-and.ac.uk/~history/Quotations/Dodgson.html
For nearly a decade, we have been living in what Justin Romando calls the "looking glass world." At first, it wasn't so obvious, but now even the truly obtuse can see it.
I stumbled on Raimondo's columns and the related antiwar website a few months back. It took me a few columns to get past the name Justin Raiiimmmondo, it sounds so made up and grandiloquent. With that confession I'll say I'm an unabashed fan of Justin's. He does his homework, has an extensive base of knowledge and thinks and writes very clearly. He also takes positions you would never see in a million years from nearly all journalists. While at this point, I can find points where I disagree, I very often agree, and he is in actuality thought provoking coming at things from angles I would not have considered. When I read his writings I find myslef saying, "ah, so this is what independent journalism reads like". No I am not acquanited, related, married to him etc, just want to say he is one of the most coherent voices against war I've read.
Bringing this back on topic, Anti-wars columns are often rather seemingly conpiriatorial and while I would say I am less doomer than most here I am likely more conspiriatorial. The question I ask myself on the housing bubble, and even being conspiracy minded usually come back to unrestrained greed followed by rich people protecting themselves first, but was it orchestrated? Was it so hard to foresee the debt inducing consequences of absurdly easy credit? There is the repeated observation that most Americans have most of their net worth in their homes. Rich people like to get at money, and some of them don't even like other people to get rich too.
Their was no way to get at this wealth while it existed as a plain vanilla contract between private citizens. The further abstraction of securitizing mortgages allowed for shell games to be played. With the bailout of the banks, the end-result is the transfer of wealth from all citizens to banks.
Second, private property is a big deal and in some fashion will remain so. One may go back, what 6,000 or more years, to Abraham's insistence on buying by contract a burial plot in his new homeland so that he would have legal title in the "promised land", even, if I recall correctly, when the sellers offered to give him the plot, without contract?? for free.
Private property contracts though interfere with the centralized power of the state. So we see communists outlawing private property ownership. In the present situation, fewer people will have private property, those that do will likely lose money and the government will directly hold the mortgages (with the nationalization of Fannie and Freddie) of many private properties. The government has no claim to these properties, but now they in essence own them.
Finally, this bubble has led to mass "nationalization" of and government intervention in banks. Was a scenario created which ensured that banks would need to consolidate and be nationalized with a goal of consolidating money in fewer hands. Put in an international overaching bank and you have something.
I certainly don't have any crystal ball so take with a big grain of salt, however, to be conspiracy minded, home prices will first fall much further, forcing further consolidation of banks and further restricting credit which will further decrease the number of potential homeowners (perhaps along with massive economic depression). At some point, maybe in 3-5 years or sooner if inflation kicks in, home prices then accelerate greatly to price out all but the very rich from owning property and even their ownership is more and more mediated through the government.
I don't fully believe the conpiracies I've outlined here, I think the simpler explanation of greed/fear and the actions of the wealthy to try and protect themselves also fits, but I find it fascinating in a macbre way to look at who is benefting and what the consequences may be.
Or not! An upturn is only inevitable when the houses become more affordable - which, judging by where I live to the East of London, is not soon! Who do I trust, the Government or my lying eyes?
The cause of the housing demand slump is just like the cause of peak oil, it isn't the price of anything that is the problem but affording the price - it's not the same thing!
The statistics show prices are falling like a stone and people still can't afford to buy!
As the article says:
You can't argue with that, but will it be to a real price higher than the recent peak, and it will happen anytime soon? ... who knows? ... but in the UK, peak coal, peak oil, peak phosporus, peak gas, peak boomer retirements, peak food and peak debt etc says ... probably not!
Plan accordingly, there is money to be made (but not yet), watch Warren Buffet for tips on what to do.
More housing units is never the only way to address a supply-demand imbalance. It nearly always possible to increase the number of people per unit. Guess which is more likely to occur after an economic crash.
i don't think i saw any link here on drumbeat to toshiba's latest set of batteries, the SCiB
http://www.greencarcongress.com/2008/09/toshiba-scib-li.html
plus, they signed a partnership with schwinn to use them in electric bicycles in early 2009. and besides, i expect toshiba to deliver, unlike eestor or a123
expensive as they might be in the beginning, we should have enough of these in 5 years or so. hell, we should be having at least 5 models of long range mass-produced electric cars by then (mi-ev, renault's electric car, tesla sedan, chevy volt, smart electric), to name just a few
I think electric bikes which can be recharged on board trains are a good commuting solution.
There was a TV5(France) special about the Paris auto show a few days ago.
Looked like every European manufacturer had some prototype or concept model of an electric car. In Europe, I'm sure that they would be very practical.
I counted about 5-8 different models.
"Asked to explain further his reason for saying Harper's government has been "sold" to the oil industry, Duceppe said it's because of $2.7 billion in tax breaks the government gives to the oil industry"
Of course, Quebec, even when the Pequistes were in power, has never given subsidies to any of its businesses, nudge, nudge, wink, wink.
Quebec may be in a better position to withstand Peak Oil because of its strong hydroelectric system. Alberta has some hydroelectricity, but because most of our mountains are in national or provincial parks, there is a limit to how many valleys can be dammed. It doesn't help that Calgary and southern Alberta depend for water and hydroelectricity on glacier-fed mountain rivers, and those glaciers slowly melting away. Nuclear power plants to supply the oilsands projects are still being debated, with no actual construction yet. Alberta currently does not have any nuclear power plants.
Coal-fired electricity seems to be the future for us, but the big problem is the transmission lines. Like cellphone towers, everyone wants the services but not the visual blight of power lines. The usual NIMBY. If rolling blackouts start affecting the big cities, then the environmentalists and farmers will quickly be squashed. Gotta be able to recharge our laptops, iPods, and cellphones.
And run the fan for the natural gas (or propane) furnace.
Alan
What about HDR geothermal? (very deep, inject water, get steam, run electric turbines). MIT and U of C have been doing research. Germany and Australia are in commercial phases. However, it seems only the Green Party of Canada is committed to supporting serious R&D on the matter.
Evan (Green candidate up in Red Deer)
Alberta has excellent wind and some hydro left to be developed. Why not concentrate on that (with pumped storage and more transmission lines).
I have a well worked out plan for 175 kph electric train service Calgary-Red Deer-Edmonton-Ft. McMurray. eMail me (no link in your bio, one in mine).
Best Hopes,
Alan
Evan:
Back in the 1980's Bow Valley Industries worked with the AB provincial government to build a toxic waste incinerator based on thermal gradient.
Basic concept was a deep bore hole. Toxic effluent was pumped down to the high heat region and combusted. Not sure what became of this project. Project site was north of Edmonton up in the wilderness somewhere - I cannot remember name of community.
Best of luck on the 14th!! May you do well!! :-)
Thanks. I'm not sure about Alberta, but overall, it's looking good for the Greens in Canada. :)
Subsalt -- Presalt
Brazil's Tupi structure is about 24 miles long and 6 miles wide. Seismic work identified subsalt prospect boundaries before drilling commenced. Drilling confirmed the presence of oil in the almost 350 foot thick porous limestone reservoir. Tupi may contain 8 billion barrels of recoverable oil of 32 billion barrels in place; at a 25% recovery rate.
http://www.rigzone.com/news/image_detail.asp?img_id=4917&a_id=57743
The Carioca-Sugarloaf complex is thought to be one giant complex with four times as much oil as Tupi, but this has not been confirmed yet. The subsalt play discoveries have been extended to the Campos and Espirito Santo basins. It seems like a very large play, more than peak oil theorists could have hoped for.
http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3450&MONTH_Y...
African deep offshore subsalt potential has not been tested yet, seismic work is currently scheduled.
The Gulf of Mexico subsalt play is made up of dozens of smaller fields, the exact number not yet known. Each structure might be found to contain hundreds of millions of barrels of oil to over a billion barrels a piece. The GOM subsalt extended all the way to the Mexican border, thus Mexico might expect to have some offshore potential remaining.
As people anticipated peak oil a flood of new oil discovery not seen in decades has been occurring. The offshore wells took months to drill and were very expensive compared to the onshore discoveries of the 50's and 60's, thus the new finds might not bring an era of cheap gasoline as was seen during the 1970's. Ultra deep water drill rigs are not available for hire this year or next. It takes three years to build a rig and shipbuilders are booked solid. As drill fleet growth may compound, eventually annual production growth offshore might outperform current expectations.
One deep water block off the coast of India is expected to increase Indian petroleum production more than 30% within two years.
Peak Oil theory did expect new discoveries. Those subsalt discoveries are a dozen or more to twenty years from full production.
Alan
I don't believe the Peak Oilers ever said the world would run out of oil. Only that it would run out of cheap oil.
At some point, the cost of extraction of a resource becomes greater than the economy can support. Probably, in the case of oil, it will occur when it is cheaper to use human labor than oil-powered labor. I imagine that time is a long way off.
Strange, but I thought Peak Oilers always said we would have a "production peak", a maximum in the flow rate. Cheap or expensive does not enter into it.
From the horse's mouth:
http://www.energybulletin.net/primer
Not to mention each field found gets slowly and progressively smaller. 8 billion barrels is not allot of oil considering current consumption.
Peak oil has NOTHING to do with reserves, and especially not reserves that haven't even been discovered yet!
Peak oil is about affordable oil - at an average of ~$90 for a barrel, oil is now much less affordable than the ~$10 of 9 years ago, and deep offshore oil is much less affordable/profitable than the mix we are using today.
".....reserves that haven't even been discovered yet! "
huh ? are you implying that oil not yet discovered can be called reserves ?
Why are gas prices up 8 cents in one day for the Houston area? Are they the first to recognize a shortage, or is it simply a glitch in the price data? Everywhere else they are falling.
http://www.houstongasprices.com/
Perhaps because Atlanta actually has some gas. Premium seems to still be in very short supply (most stations don't seem to have it), and some stations still have nothing at all (seem to be ones on the spot market). More gas for Atlanta would seem to mean more demand.
It was no doubt a glitch as this Morning the price was 3.444 and later today the price was 3.344 compared to yesterdays price of 3.357.
I had a long talk with my brother yesterday afternoon. He is a petroleum engineer who works for a regional bank in Ohio. He works in their oil and gas department and makes loans mostly to small independent oil and gas producers.
I was telling him they must be jubilant with the passage of the $700 billion bailout on Friday, that they could now sell their bad nickels for a buck. Surprisingly, he was adamantly opposed to the bailout, because his bank doesn't have that many bad nickels to sell. He says the bailout will reward banks that made bad investment decisions, and nothing for banks that managed their business well.
That is the purpose of the scam-that is why no objective criteria were ever specified for who would get how much taxpayer money and why. Literally a blank cheque with zero oversight and absolutely no one looking out for the country or the taxpayer. I cannot see anything stopping this program growing like a weed.
Nouriel Roubini says this coming week may bring a complete seizing up of credit markets:
http://www.rgemonitor.com/roubini-monitor/253853/financial_and_corporate...
He also says the $700 billion bailout did nothing to ameliorate the problem:
http://www.rgemonitor.com/roubini-monitor/253783/is_purchasing_700_billi...
We may have a very interesting week ahead.
DownSouth, as credit dries up, I suspect there will be glitches and jarring on just-in-time deliveries. The freighting of goods seem to be as interwoven as dodgy derivatives in a globalized marketplace. Once these cogs tighten up the whole system may seize.
I wonder how well the retail industry will hold up? Will inventories keep moving until American Thanksgiving?
Canadians celebrate Harvest Thanksgiving a week from Monday. Will the consumer economy hold up even until then?
Keep your eyes peeled for unexpected twists and turns as this unravels.
Though highly unlikely Bush will come out now and say to the American people, "relax, don't worry, go shopping." A new mantra will be required to assuage the passions of the public.
Time to hoard up on essentials like beer and popcorn. An interesting week is guaranteed!
I guess most of the people here will know this anyway, but for anyone who is not familiar with the way some of these banking crises typically play out, a large cash float is often a good idea - the chance of getting it stolen by burglars is less than that of getting caught short as accounts are often frozen for several days.
The lack of consumer spending during the coming Christmas season will sound the death knell for many, many retail businesses.
The fallout of this season's retail results will hit in January 09. Expect many, many store closings.
I read yesterday on an obscure link couched on the Yahoo homepage that there are still some 300 missing people since Ike's passing, 200 of which were from Galveston.
I remember some idiot cheering on a friend's decision to stay and ride out the storm on this site as Ike approached.
Does anyone know what happened to the man and the family in question?
I'm not sure that guy actually had a friend in Galveston. He may have been just trolling.
Many of the people who declared their intentions to stay actually left once they saw the water rising. "Canoe man" - the guy who said he would just canoe out if necessary - was one of them. He fled before the storm arrived.
CNN had a story "300 still missing since Ike hit Texas" but curiously the link now leads to a blank page. I linked to the story a couple of drumbeats ago
http://edition.cnn.com/2008/US/10/02/ike.missing/index.html
The story began
Don't know why it is no longer there (been missing for a day at least now).
I figured that CNN page would have a short lifespan, so I kept a version of it open since the day it was posted. Here's an excerpt:
Also:
Hoping that some (or all) of these missing made it through the storm alive...
-best,
Wolf
Thing is the story was posted all over the net. Google "300 missing ike" to see what I mean. Don't think I've seen CNN page blank a widely linked story before. Update it yes but just replace it with a totally blank page?
Edit: As of time of posting the CNN story can still be seen in Google's cache
Here's a cached version of the story: http://74.125.45.104/search?q=cache:kaJ1xpncntQJ:edition.cnn.com/2008/US...
That link doesn't work for me in Firefox 3. Works fine in IE though. The text version of the link I posted above should work fine if anyone else has trouble reading it.
I could have sworn that Google didn't offer a cached version of the page when I first looked (or I would have posted the link at the time) but it is certainly there now.
Edit:
Here's an interesting (and angry) ABC13 exchange with Governor Perry I've just found entitled "Why Is Media Denied Access To Report Ike Devastation?"
http://www.youtube.com/watch?v=db81M7q-5to
Perry's words at the end are interesting.
BTW, Undertow, if I'm getting your gist correctly, I feel the same way you do: The reporting on Ike's aftermath is, well, kind of "twitchy"...
One might argue that all the other big news--the fiasc... er I mean election, $700-billion gift exchange, O.J. (OK, the last one is a joke; well, maybe they are all jokes)--buried the storm reporting among the national media chains, but there's still something strange about the relative lack of Ike coverage.
Here's a question: Is a forced localization, due to developing energy scarcity, beginning to show up in the way national events are being covered in the news? (I suspect that it's probably just infotainment reigning supreme.)
-best,
Wolf
Just as there was something seriously awry about Katrina coverage, especially on the subject of overall fatalities. I've seen rumors of over 1,000 dead from Ike, but haven't been able to find much in the way of serious follow-up reporting on it.
If you have ever been to Bolivar, the peninsula is several miles long, a few hundred yards wide and not a spot of it over 10 feet above sea level. It may be terribly cruel to say this, but there is something Darwinian about people staying on the Bolivar with a forecast storm surge of some 20 feet to hit in a couple days. You can get off Bolivar and up the coast many miles in a half day before the storm hits. To stay there is probably good for the gene pool.
The west end of Galveston Island does not have a ‘sea wall’ to deflect waves/surge and is similar to Bolivar in that no place is hardly 10 feet above sea level. The same goes on west to Lake Jackson and beyond. If people want to build there, that is their business as long as I do not have to pay for their stupidity. If they want to stay there with the forecasted severe hurricane, sorry bout that.
We lived in Texas City years ago in a trailer. When a huricane was coming in, we just went north and west to San Marcos and came home in a day or two after it passed. Our parking space was well scrubbed almost like new.
It was impossible to get off Bolivar half a day before the storm hit (other than by boat or helicopter). Plus a high proportion of the missing are in the age range 70-90. Some made last phone calls to relatives as promised help to evacuate earlier in the day never arrived leaving them stranded.
There was no reason not to leave the day before. Local news was negligent in downplaying the early surge risk, which was widely expected.
This, in a nutshell, is why capitalism has to be tightly regulated.....
A competitive society places a greater value on out-performing one's peers than it does on absolute performance. You get nowhere by being good, you have to do better than the others. Result: mass risk-taking (in small steps).
The New York Times explains:
Pursuit of an Edge, in Steroids or Stocks
I don't think regulation is sufficient. Corporations that get large enough will always acquire undue influence over the regulators. In addition to regulation there needs to be some way to restrict corporations from ever getting large enough to buy the government. Once they get big enough, it is too late.
I have most of my retirement money in energy-related mutual funds for this very reason. I figured a good manager - with experience and better data/tools - would do better than I when it comes to managing a portfolio of stocks.
I used to work in a major oil industry's oilfield research lab - and personally have seen the very things people discuss here. As far as I am concerned, Oil is amongst the most valuable things on this planet, and unlike everything else ( which can be recycled) , its getting consumed by the day. Hence, Oil is the only investment vehicle I personally feel comfortable with.
Given fund managers have much better financial research tools and data, as well as they are PAID to watch the financial system minute by minute and steer my investment, the question is why do they they are not pulling out or shorting when appropriate? I am quite appalled by the 50% or so drop from the July peak, or are the fund managers as clueless as I when it comes to actually managing a stock portfolio?
Anyone have suggestions?
A lot of them have a mandate to be fully invested in equities and are not allowed to short. The reason they aren't allowed to step off the tracks is because no one wants to pay stock mutual fund fees for a money market fund and that it makes "asset allocation" more difficult (i.e. you could be less exposed to equities and more exposed to bonds than you thought). Yes, it's nuts.
SNL does a great "Bailout for Dummies".
http://www.nbc.com/Saturday_Night_Live/video/clips/c-span-bailout/727521/
LOL
Yep, that's the way it is. ROFL
Zeitgeist: Addendum was released in the last few days. Briefly discusses sustainability without directly mentioning the problem of growth, and while largely ignoring the current population overshoot problem, species extinction, and climate change.
Briefly discusses the energy available from solar, wind, tidal, and geothermal, yet completely misses the current systemic dependence on petroleum or the lead time necessary for change.
Also discusses money creation, dependence on debt and profit, and societal fragmentation.
Worth a view, if for no other reason than to be able to come up with explanations as to why mag-lev trains, geothermal plants, and improved battery technologies aren't solutions alone.
Zeitgeist: Addendum (google video)
Movie Website
Russian oil exports drop 10% year - year.
Russian Oil Output Falls for Ninth Straight Month
http://www.bloomberg.com/apps/news?pid=20601072&sid=aFRsXOPD8qmY&refer=e...
http://www.istockanalyst.com/article/viewarticle+articleid_2679998.html
Gee, now they are telling us that the Great $700 Billion Bailout Package won't work - Unless the price of houses stops falling and starts going up again.
I don't remember anyone saying anything like that before the RUSH vote to pass the legislation?
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MELTDOWN_CREDIT?SITE=FL...
Is the Bailout the chicken or the egg?
This writer is either ignorant or a liar-this bailout is in no way designed to increase bank lending.
Not only that, small banks will likely fail anyway.
http://biz.yahoo.com/ap/081005/shaky_banks.html
Some were too quick to take credit for fixing the economy with this market finance bill.
This has been in the banks power all along, just stop the houses coming onto the market as distress sales. If someone defaults on the mortgage instead of chucking them out rent the house to the occupants, for say 2 years. The bank gets some return on it investment and they have some possibilty of stemming the crashing prices. Foreclose on the house and it just sits on the market, some get wrecked, and the bank gets no money from the asset.
If you have a good credit rating, a good job and 10% to 20% down, you can get a housing loan almost anywhere. If the $700 billion works then you won't need any of that so the commissions and bonuses start flowing again.
We will all know if it is working when the Christmas bonuses are given out in a couple months.
I believe our Sec of Tres will have no problem finding a high paying job come January.
There are solutions, but in a society undermined by entitlement babies at both extremes of the spectrum there is no political action because politicians are bought by minority interests at the top and the bottom.
http://blogs.ft.com/maverecon/2008/10/the-tarp-has-been-passed-what-more...
Dammit.
If the price of houses stopped falling and began rising, they would not have had any justification for the $700 Billion bailout.
Now, it looks like we are going to have to hyperinflate ourselves out of this AND have the $700 Billion Dollar albatross on our back.
Congress: Thanks, Guys! ;(
Dean Baker, Mark Weisbrot of CEPR both said the "gift" was wrong. Hundreds of other economists echoed them. Millions od citizens did too. Leaders of the Progressive Caucus tried to forward the No Baoliouts Act, but were thwarted by Pelosi and Reid.
Plenty of credit is apparantly available. We got 5 different come-ons for cards and loans just last week--all pre-approved!
Germany Guaranteeing all Savings Accounts
http://news.bbc.co.uk/1/hi/business/7653317.stm
This is a total volte-face over the weekend, and will surely mean that all European countries will have to follow suit.
Can America and Japan hold out?
Roubini thinks the US should do the same for a period of a few months. Even with the increased FDIC coverage, over 60% of all deposits are uninsured. If fear of bank solvency causes those people to pull their money out of the banks, the US banking system will crash.
Restoring trust in banks' solvency should be job #1. However, the Fed still loans money in secret to banks, so we don't know who is solvent and who is not. The govt is suspending mark-to-market requirements and allowing banks to keep their level 3 assets marked to model (a.k.a. marked to make-believe). There is going to be no transparency or accountability in Paulson's administration of the bailout. The government is doing exactly the wrong things to address confidence.
Citi has 1 trillion in level 3 assets, and that's just one bank. 700 billion is grossly inadequate, and everyone knows it. Until people know who is solvent and who is not, the banks aren't going to want to loan to each other, and we will remain at risk of a run on the banks. Administration policy in general, and the bailout in particular, is remarkably similar to what the goverment did in 1931 and 32, just change "Hoover" in the old new stories to "Bush" or "Paulson", and they could have been writing about 2008.
I'm beginning to think a "bank holiday", as in 1933 is what is needed. One of Roosevelt's first steps was to shut down the banks for 4 days, go over the books, and do triage. The solvent banks were recapitalized. The failing banks were liquidated. That restored trust, because people finally knew which banks could be trusted. The Bush administration is doing everything it can to keep people from learning that information. They are trying to save every bank, and by doing that will save none.
shargash, I agree completely. This sure ain't no way to run a railroad. The Bush administration has managed to take accountability and turn it on its head.
Auditors should be sent in to make a determination which banks are solvent and which banks aren't. Insolvent banks should be closed and their directors investigated. If malfeasance is found, they should be tried in criminal courts of law.
Banks that are solvent, that have demonstrated good judgment and good management, should be given all the assistance and support we can possibly give them, and be audited on a regular basis to make sure they stay honest.
This is what is called meritocracy. Good performance gets rewarded and gets a gold seal of approval. Bad performance gets liquidated and, if there's malfeasance, a nice vacation in federal prison. That's the way you restore confidence.
Instead, what Bush and Paulson have proposed is just the opposite. Banks that have made poor judgments and were poorly managed have their balance sheets loaded up with toxic waste. But they get to redeem their worthless trash at face value. So bad managers, who should at best be put out of business, and at worst be imprisoned, come out of this thing in equal or better shape than the managers who showed good judgment. Bad management gets rewarded. Good management gets punished. After it's all said and done, you have a bunch of crooks running the nation's banks, and everybody knows it, including the other bankers. So there's no trust between this den of theives, no confidence.
Another thought struck me. If you're a well managed bank like Wells Fargo and don't have much toxic waste, you certainly need to get some. Could this be why there is so much competition for Wachovia? This is like alchemy. All that toxic waste weighing down Wachovia's books like lead before last Friday may have just been converted to gold.
My suspicion is that Wells Fargo is not on Paulson's list of banks to save, whereas Citi is. If WF gets Wachovia, that would make it much harder for Paulson to allow (cause?) WF to fail. Just like they let Fanny & Freddie load up with crap loans all year long, knowing they were going to have to bail them out, I think they're trying to push as much crap on Citi as possible, so that Congress will have no choice but to say "Yes" when Paulson comes back for the next installment of bailout money (700 billion is nowhere near enough; Citi alone has $1 trillion in level 3 assets, sans Wachovia).
From FDIC Bank Find:
Wells Fargo Bank, National Association
101 N. Phillips Avenue
Sioux Falls, SD 57104
FDIC Certificate #: 3511
Noncurrent loans and leases means "Assets past due 90 days or more, plus assets placed in nonaccrual status."
Assuming the data is accurate 2.7% of Wells Fargo's loans are bad, 1.4 times more than last year. They are not as well managed as propaganda would like you to believe.
I remember fondly when the name for European cooperation was the EEC, the European Economic Community. Good thing they changed it to simply the EU, the European Union, since economic cooperation is in obvious short supply. How long before the fiction of "Union" becomes apparent?
As Voltaire once pointed out, the Holy Roman Empire was not Holy, nor Roman, nor an Empire by his day. History shows such fictions can last a long, long time.
Looks like matters are unraveling equally fast across the pond. Best wishes to you folks amid this storm. Godspeed & Cheers!
Ireland saw the danger of cascading bank failures and moved to gaurantee bank deposits. This caused British depositers to try to move their deposits to Ireland. Germany and Spain are in danger of bank runs.
Banks are bit shaky on the eastern shores of the Atlantic also.
Should one pity the people with deposits in the Bahamas, Caimans, or Caicos? I am not sure if those little governments can offer any type of insurance for depositors. U.S. banks might be safer.
I can see it now..(Sarah Palin buys shoes and pays with 30-30 rounds of ammunition)
Local retailers sell a dozen eggs for a box of S&W 40 cal. Condoms become legal tender in Vegas, Trojans are $100.00 chips now. Bags of NPK are like Saffron spice or Opium....what am I taking about? People already sell their livers, it isnt even considered news anymore. This is SUNDAY nite and of COURSE people are nervous the markets open on Wallstreet in just hours.
Anyone think nervous is good? I dont...I told my wife.."Honey, if you ever need to point a gun at someone....do it like your shaky..cause nothing scares em, like a women who's shaking so much, it might go off just because"
This market might vortex, just because, everyones shaky.
the visual you have just given makes me curl over laughing, thanks. i needed that! esp. in times like these.
This was forced by the Irish guarantee. Can't allow capital flight into UK proxies.
Via a note from our newspaper deliveryman, I find out that at the end of the month, two of the three regional newspapers will no longer be distributed in Siskiyou County, Ca. neither by home delivery nor to news stands. Mail delivery will still be available, but the Sunday edition will come on Monday. This is bad news and good news. Business are reacting to high fuel prices by cutting back. We will adapt, mainly by spending more time in front of the computer.
Just heard on NBC Nightly News that half a million barrels of oil was spilled in the Gulf by Ike. Half a million barrels, that's a bunch.
A neighbor who heats with Gas just told me his supplier told him they will be finding out this week if there's going to be a 30% hike in Gas prices this week. He said they were not vague or casual about that amount, but that in a couple days, they would get word of this 30% hike or not.
Anybody else hear about this?
Bob
Portland, Maine
Did you know there is a gas shut off valve that shuts off gas to your home? Not the one inside...the one out in the yard or near the street usually. Iam not suggesting anything here, but you could shut of the gas and bleed the system off after the valve, then excavate near where it enters the home..or in the middle of the yard someplace (to fool the neighbors) pretend to be planting a tree or shrub. Then tap the line at that junction..bury line into house (preferably otherside of dwelling from legit gas line)
So meter readers dont get suspicious..and dont get greedy...just alternate every few days on/off between the two lines. The one thats metered and the one thats not...I wouldnt do this myself or suggest it, just saying, probably has happened though.
Martin the Martian.. (Marvin?)
"Where was the Kaboom! ?? There was supposed to have been an Earth-Shattering Kaboom! ?"
Actually, I'm supposed to be on the roof right now, tapping into the sunlight that is currently and persistently bouncing off the asphalt up there.. With that kludge in place (Solar Hot Air Collector, in this case) and its anticipated siblings, I would be more than happy to make the Oil Company suspicious.. and also this dry-as-a-bone 1850 wood-framed house wouldn't have to shudder at the potential, unintended side-effects of my mad experimentations..
Bob
Bored? Palin getting ready to speak live 7:15ish Central Time.
http://www.ketv.com/video/17629591/index.html
http://investment-blog.net/us-ships-800-billion-ameros-to-china-prepares...
The US Secretary of the Treasury has informed the China Development Bank that the US has shipped $800 Billion of a new currency called the Amero, which is to be based upon the merging of the economies of The United States, Mexico and Canada into what is termed as The North American Union.
geewiz: I dont believe it. I question the source provided also. Dont get me wrong, I understand the Federal Reserve has as much to do with the Federal Government as Fed-Ex...And I also think the names Freddie mac and Fannie Mae are hilarious quasi govermental institutions. I realise the DOD or Dept of Defense was once called "THE WAR DEPT" and it waged wars...but the DOD never defends, it only attacks. But Iam calling BS on the Amero story.
I don't buy it, either. There's no evidence ameros even exist, let alone that we're sending them to China.
well, it caught my attn, and i don't really know whether to beleive it or not. i can't really seem to find any reliable source to verify it.
Until the new currency is close to release, I expect the mainstream media to continue to ignore/debunk its existence. It has been discussed on some reputable programs, though.
Some clips:
http://www.youtube.com/watch?v=6hiPrsc9g98
http://www.youtube.com/watch?v=H65f3q_Lm9U
As they say: where there's smoke, there's usually fire.
speaking of where there is fire:
the trans texas corridor is a NAFTA thing, and is very real, you only have to look at highway 59 north out of houston, all the way to north east texas to see that something is up.
google trans texas corridor and you'll see that mexico will be eventually be connected to canada via interstate highways. this project is so slow, many people don't see it coming.
and how things are changing so quickly, i can't help but wonder if this north american union may happen before we know what hit us.
Absolutely agree. Its plain for all to see that the status quo cannot be maintained for much longer. Given the persistent rumors of the dollar's imminent demise, one would be naive not to think that the elite haven't put a plan B together -- one which involves a completely new currency.
Maybe it won't be called the "Amero", but given the existence of the corridor -- which you pointed out -- and the continued integration of the three North American countries, including the well-publicized meetings between the respective heads of state, its safe to assume that the planning for such a move is now in the advanced stages.
It could happen at any time, particularly in a period of acute financial stress, as is occurring right now.
Not that I'd put it past the current US admin, but I don't think China would take any Ameros before the USA actually surrenders to Mexico. And there are those who don't think the Euro will survive.
Snopes figures the Amero ain't real....
http://www.snopes.com/politics/business/amero.asp
But they're not bad looking...
So how you Canadians feel about this, eh?
Rather have my foreskin caught in a blender!! :-0
Why would you want to ruin a perfectly good blender?
Canucks can easily deal with this sort of Amero nonsense. On the 14th vote for Duceppe.
Cheers!
How much gold in those, 1% 2% 10%?
They just might pull it off.
It probably has the same metal content as the Presidential Dollar, which is worth under 5 cents.
As a Canadian just the thought of this terrifies me. With the ratio of the Canadians population to the U.S. we would last about 3 days as a viable entity. I have a lot of U.S friends and most of them ask about moving here.
Roly
One word for this speculation: bovine crap!
Paulson has most of the American public pi$$ed off right now. Such musings would only serve to spread the outrage beyond the borders.
Calling Chico and the boys Gringos would ignite some pretty explosive nationalist sentiments in the promised land of Tenochtitlán. And Charlie Canuck would see this as the Great White North bailing out the overindulgent elephant next door. Any self respecting Canadian prime minister would send the US Ambassador packing with a gift wrapped copy of Aesop's 'The ant and the grasshopper.'
Mind you, Stevy Wonder Harper is enough of a neo-liberal nut case to suck up to the Shrub. Here's hoping for a minority parliament north of 49 next week.
Hate to see my country get Bush-wacked. Painful enough to see my American friends going through this flaming ordeal.
This woman is just unbelievable. What exactly is her job? To take the most obvious, widely acknowledged geopolitical facts then deny them in hopes of creating some kind of alternate reality?
Well...yes.
That's precisely the quote I was thinking of before making the post. Great minds think alike. :-)
Condi Rice actually spends more time, picking out shoes, than she does in creating credible lies. I cannot offer evidence thats sufficient to support my claim, so I will say, its an absurd claim that I make and qualify it as such.
But having made the "absurd" claim...I can assure you its true and 100% factual. I suspect further that most people suspect its true, not cause its probable or believable...but because its true.
9:45 PM Eastern standard, Sunday, Just peeked at Asian markets, they opened down early and look to be swirling downward fast (Shanghai) the only exception.
Shanghai up over 6% while everyone else down about 3%
Ive been saying (check back to prior posts) and wish I would have been wrong. You know how they say..."You can learn the most from your mistakes"? Thats like saying "The dumber you are, the smarter you can become" Its a crazy world isnt it? HEY! Iam just like everyone else, I live a life of quiet desperation. The only thing that makes me different is, I found a way to enjoy it. Try it once...go ahead, its not addictive or anything. Consider it practice, for dying with dignity, make a nobel cause out of it. Whoops..just checked Shanghai, it turned on a dime and has hit the ground like a rickshaw with a blown flip flop on the driver. OUCH this is gonna hurt!
Machete' moshpit party spooling up in India:
http://www.nytimes.com/2008/10/06/world/asia/06india.html?ref=world
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GUWAHATI, India (Reuters) — At least 33 people were killed and thousands left homeless in violence over the weekend between tribal people and Bangladeshi settlers in northeast India, the police and hospital authorities said.
..The deaths included eight people shot Sunday by the police, who opened fire on rioters.
Villagers from the two groups fought with guns, bows and arrows, machetes and spears. More than 100 were wounded, and 50,000 fled their homes to take refuge in makeshift camps set up by the police...
-----------------------
What!-->No sewage-dipped pitchforks with lethally sharp tines? :(
"36 Opportunities for the Beginning of the Bull"
I totally agree with this post. History repeats itself over and over again, and its when people start talking about how low can it go, its ready to start going back up.
Its just like when people started asking how high can real estate prices go, and they started down.
The same thing is happening now. Once Obama becomes our new president (knock on wood) people's perceptions will improve and the market will start going up again. I'm on with the Pickens plan. Even though it's low right now, I'm going with ticker symbol CLNE. When California passes its prop. to provide a tax incentive for use of CNG/LNG, and then later Obama in his first 100 days goes for Pickens plan, that will be gold! Pelosi has $200,000. in CLNE - hmm, I wonder why?
I have another pick I'll share in about 2 months.
Yes sir, sounds like bull to me.
And pork, too. I can hear the little piglets lining up at the trough now.
Behind every hot greasy turkey, there's always a gravy train.
Zadok_the_Priest,
I agree with you. If Sen. Obama wins (as I suspect he will) he'll have a clear choice: keep his social promises and tax the hell out of the economy to pay for them. Or cut spending and reduce taxes to aid the recovery. And assuming he doesn't want to be a one-term President he'll go with the former. This policy combined with cuurent state of the economy should, IMO, produce one of the great (and possible longest) bear markets in history.
I can't see him doing either-my bet would be huge spending with overall tax cuts. I expect a 2 trillion deficit for 2009, increasing each year. IMO the whole idea of balnced budgets or any sort of fiscal responsibility went out the window with Paulson's scheme, which I expect to grow like crazy.
Us Brits wake up with a bucket of cold water:
http://uk.finance.yahoo.com/q/bc?s=%5EFTSE&t=1d
Here was me thinking the FTSE would pump the other way on the bailout news :-(.
And merkel had to go and cock that up big time:
http://business.timesonline.co.uk/tol/business/economics/article4888248.ece
I am itching to see where Darling moves his Queen (or will it be checkmate?!)
Marco.