DrumBeat: February 2, 2009

Russia in outer darkness

MOSCOW - In outer space, as everyone knows, the absence of the force of gravity produces the appearance of weightlessness. Everything floats away.

The markets have decided that Russia is now without gravity; its equities are without weight, and at risk of floating away. Late last year, the RTS, the principal stock market index, starting decoupling from the price of the principal Russian export, oil, as the latter started to plummet. The emerging market investment funds, which have also moved with oil and Russia's other exportable commodities, also decoupled from commodity prices and the RTS.

Oil falls 4 percent on more bad economic news

SIOUX FALLS, S.D. – Oil prices tumbled nearly 4 percent Monday in a volatile trading day fraught with more bad economic news, including thousands of job cuts by Macy's department store.

Light, sweet crude for March delivery fell $1.60 to settle at $40.08 a barrel on the New York Mercantile Exchange after tumbling at one point to $39.83.

Oil Industry Wary Of New US Interior Secretary's Policies

WASHINGTON -(Dow Jones)- Despite Interior Secretary Ken Salazar's vow to draft a comprehensive energy policy that includes new domestic oil and gas drilling, the industry is watching with a wary eye.

Salazar hasn't been specific about where he will open new acreage for lease sales. But based on his comments so far, some industry officials fear that new drilling rights under such a plan may be in areas that show little promise compared to other prospects likely to remain off limits.

The officials also say the secretary's pledge to reform the government's royalty program, which collects billions of revenue from the industry for federal coffers, may discourage even more new projects.

Leak shuts Nautilus gas line

Enbridge’s U.S. unit declared force majeure on Sunday due to a leak on its 30-inch, 101-mile Nautilus natural gas pipeline in the US Gulf of Mexico.

Oil company deals thrown into limbo A crippling dispute between deputies and the government could lead Kuwait to shelve or postpone new oil service contracts to boost output and deals to build one of the Middle East's largest oil refineries.

Petrobras May Consider Oil-Stake Sales to Raise Cash

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, may consider selling stakes in some of its oil fields to pay for expansion if banks fail to provide loans, Chief Financial Officer Almir Barbassa said.

Petrobras may cut spending if cannot fund capex

LONDON (Reuters) - Brazilian oil company Petrobras said it is ready to cut investment plans or raise funds from sources it previously considered unattractive if it has difficulty meeting its cash needs next year.

Iraq crude exports hit 1.89m bpd

Baghdad: Iraq's monthly crude oil exports increased to an average of 1.893 million barrels per day (bpd) in January, boosted by continuing shipments by truck through Jordan, an oil industry official said on Monday.

Petrobras says could buy rigs, contractors

LONDON (Reuters) - Brazilian state-run energy company Petrobras said could buy rigs or the companies that own them, to ensure it had the equipment it needs to advance its drilling programme.

Chief Executive Jose Sergio Gabrielli told reporters and analysts on Monday that the companies which are contracted to supply Petrobras with rigs could face construction and financing problems in the coming years.

Oil isn’t over

If Andarko’s Gulf oil field comes true, it means higher fuel prices but a much steeper climb for any alternative auto fuel. Could it be the speculation bubble created a false dawn for alternative car fuel? Can even carbon taxes force a change in the cars we drive? Andarko’s announcement is certainly bad news for those pushing Canada’s tar sands production. Canada is currently the #1 importer of oil to the U.S.

Sarah Palin: The case for drilling in ANWR

I AM DISMAYED THAT LEGISLATION HAS AGAIN BEEN INTRODUCED in Congress to prohibit forever oil and gas development in the most promising unexplored petroleum province in North America -- the coastal plain of the Arctic National Wildlife Refuge, in Alaska.

Let's not forget: Only six months ago, oil was selling for nearly $150 per barrel, while Americans were paying $4 a gallon and more for gasoline. And today, there is potential for prices to rebound as OPEC asserts its market power and as Russia disrupts needed natural gas to Europe for the second time in three years.

Pipeline begins process to enter U.S.

A Canada-to-Texas oil pipeline that, if approved, would eventually work its way through Lamar County on its way to refineries along the Gulf Coast, is in the beginning stages of its application process.

The first stage of the process is getting the right to cross the Canada-U.S. border, and the U.S. State Department has opened the environmental study process and is taking public comments for the next 45 days.

Analyst face-off: Chevron

Is it overvalued or ready to come out on top when a rebound hits? Two analysts, a bull and a bear, give us their take.

Why these strikers may tear down the EU empire

Looks like today the British workers outside the Lindsey oil refinery in Lincolnshire have been twinned with the striking workers at the shipyards at Gdansk in 1980: and for any worker, there could be no greater honour.

Gdansk was the moment when Polish workers stood against the Soviet empire and said there would be no more submission: 'On our knees before God, but on our own two feet before all men.'

Finally in from the cold, Qaddafi to lead the African Union

ADDIS ABABA: Muammar el-Qaddafi of Libya was elected Monday as leader of the African Union, a position long sought by the eccentric dictator pushing his oil-producing nation into the international mainstream after years of isolation.

Chavez Bonds Sink on President-for-Life Bid, Oil Drop

(Bloomberg) -- Bond investors are telling Hugo Chavez he should be voted out of office instead of winning his campaign to serve as Venezuela’s president another 10 years.

Venezuelan bonds fell the most in Latin America since December, when Chavez began pushing for a referendum to abolish term limits so he can serve through at least 2019. The average yield on the government’s dollar bonds rose to 17.40 percentage points more than Treasuries, from 14.74 points when he took office a decade ago, according to JPMorgan Chase & Co.

Energy ministry to implement 3-year strategy

Abu Dhabi: UAE Energy Minister Mohammad Bin Dha'en Al Hamili has stressed that the ministry would implement its three-year strategy to provide protection for the UAE oil, gas and oil industry exports from negative impacts of the United Nations Framework Convention on Climate Change.

OPEC Plot Could Siphon 15-20% of Stimulus Dollars to Offshore Oil Suppliers' Bank Accounts

Congress's trillion dollar economic stimulus plan fails to address one of the primary threats to our future economic stability: OPEC's plan to push oil prices up which will siphon hundreds of millions of stimulus dollars to the offshore oil producers, according to John W. Rich, Jr., a leader in the waste coals to liquid transportation fuels field.

U of Minnesota study: Cellulosic ethanol may benefit human health and help slow climate change

Filling our fuel tanks with cellulosic ethanol instead of gasoline or corn-based ethanol may be even better for our health and the environment than previously recognized, according to new research from the University of Minnesota.

The study finds that cellulosic ethanol has fewer negative effects on human health because it emits smaller amounts of fine particulate matter, an especially harmful component of air pollution. Earlier work showed that cellulosic ethanol and other next-generation biofuels also emit lower levels of greenhouse gas emissions.

China links coal use and birth defects

In further evidence that China's love affair with coal is drawing to a close, government officials accept there is a link between high birth defect rates and pollution.

Green city rises from desert

About 10 miles along the motorway out of Abu Dhabi, Khaled Awad was trying his best to get visitors excited about a patch of scrubland. “This will be the city of the future,” he said, gesturing toward the shrubs and dirt. “Zero-carbon and run on totally renewable energy, it will be one of the first and biggest eco-clusters in the world.”

It takes some imagination. But Awad, head of development at Masdar City, insists that in a few years this plot of desert will be transformed into the most technologically advanced, environmentally friendly city in the world. Designed by the famed British architect Lord Foster, the 6.5 square kilometre “city of the future” will be suspended on stilts 20 ft above the ground, increasing air circulation and reducing the heat transferred from the hot desert floor.

Russia: Oil Output Declines, Price Stands Ground

Russian oil production fell to 9.7 million barrels per day in January, a 0.9 percent drop year on year, although the country's two largest producers still managed gains, data released Monday showed.

Production slid by an average of 60,000 barrels per day in January compared with the previous month, largely in line with expectations that low global prices would further eat into output, according to data from the Energy Ministry's monitoring center.

In December, Deputy Prime Minister Igor Sechin traveled to an OPEC meeting in Algeria to warn consumers that Russia would be forced to cut supplies if prices remained low. He said the drop would amount to 16 million tons, or roughly 3 percent below 2008 levels, with an average decline of 320,000 bpd.

Gas Production Drops by Over 10%

Russian gas production fell by more than one-tenth in January because of problems with exports to Europe caused by a pricing dispute with Ukraine.

Energy Ministry data showed that gas output at Gazprom stood at 1.44 billion cubic meters per day, down 6.1 percent from December and 13.7 percent versus January 2008.

Exxon Mobil, Chevron Aren't Closing Checkbooks Just Yet

With oil's price diving and a recession gripping the globe, Exxon Mobil Corp. and Chevron Corp. aren't closing their checkbooks, even a little.

"We intend to continue to invest at these record levels at least over the next five years," Ken Cohen, Irving-based Exxon Mobil's vice president of public affairs, told reporters Friday. The company's $26.1 billion in capital spending last year was 25 percent more than in 2007.

Shell Temporarily Grounds Sikorsky Choppers Amid Probe

In an unusual move prompted by concerns about the safety of a widely used model of Sikorsky helicopter, Royal Dutch Shell PLC's U.S. unit has temporarily grounded a fleet of the choppers, and instead is relying on boats to take most workers to and from oil platforms in the Gulf of Mexico.

Lightering our way to abundance

An old Wall Street shibboleth says that nobody rings a bell at the top. To prove the point, even as oil and other commodities were making blistering new highs on a daily basis last year, few people saw the carnage that was to come in those markets as the year progressed.

But the same cannot always be said at the bottom of a market. Quite often, there are many bells ringing. It's just that by the time a bottom arrives investors are usually too exhausted, too nervous or too broke even to care. And, it's true that the price of any commodity or stock can trace out a bottom for a very long time, longer than most people have patience, especially if they've already been burned in a crash. And so, the bells can go on ringing for years until they just seem like background noise.

The importance of Verleger for global oil policy

Which is the most misunderstood commodity in the world? Gold? ...Silver? According to renowned energy expert, Phil K Verleger Jr, neither of them is true. Petroleum is the answer. Back in May 2008 when petroleum prices were peaking, he said that price of crude oil in summer of 2008 should be $70 and not $140 per barrel.

Endangered Electricity System

In August 2003, a tree fell into a power line on Ohio’s electricity grid, causing more electricity to be rerouted across other high-voltage power lines to compensate. All was seemingly well. Within hours, however, three other major lines had failed, also due to falling trees. The cascading failures overloaded the entire Northeastern electricity grid and brought it crashing down. Over 50 million people were without power, 11 died, and the economic toll was calculated at some 6 billion dollars in that short period of time.

Was this an isolated incident, an unpredictable event that is unlikely to recur? In fact, the U.S. Department of Energy had warned of just such a calamity the year before, in a report titled the “National Transmission Grid Study.”

Delhi residents plump for car pool as a viable option

New Delhi: The recent strike by the oil sector companies that made petrol and diesel scarce to the otherwise wheel-happy Delhi residents has been an eye-opener.

It has forced many to rethink about car pooling. With roughly 1,000 vehicles joining the Delhi traffic daily and its citizen's apparent aversion to public transport, car pooling is being considered a viable option and permanent solution to the increasing traffic jams in the city.

Guadeloupe paralyzed by widespread strikes

PARIS: A French minister flew to the Caribbean island of Guadeloupe on Sunday for talks aimed at ending a 13-day general strike over pay and prices that has paralyzed the French territory and threatens to fuel dissent at home.

Iraqi farmers struggle and hope

The biggest obstacles that could keep Iraq importing its food well into the future include:

● A shortage of electricity and fuel that blocks farmers from pumping water out of wells.

● Poor systems to deliver water from the Euphrates and Tigris rivers to farms. Khadim’s area is served by one main canal constructed by the British in the 1930s, and another, in poor condition, that was built about 30 years ago by a Turkish company. Both need continual maintenance, Khadim says.

● Depleted seed and livestock supplies that were hindered first by the Iran-Iraq war in the 1980s and then by United Nations sanctions that followed Iraq’s 1990 invasion of Kuwait through the following decade.

Car sales: From bad to worse

NEW YORK (CNNMoney.com) -- Consumers may have had an easier time getting car loans last month, but don't look for that to fuel a rebound in battered auto sales when automakers report their January sales Tuesday.

Auto finance units GMAC and Chrysler Financial received $7.5 billion in federal loans between them since the waning days of December. That allowed them to make more attractive financing offers to a wider range of potential clients.

But forecasts of a modest pickup in sales to consumers are being more than offset by a sharp plunge in purchases by rental car companies, which in a typical year can buy close to 3 million vehicles a year.

Chrysler offers buyouts to all hourly workers

In an attempt to cut costs, struggling automaker offers cash and a voucher good for the purchase of a car to union employees that agree to leave company.

Tough choices for America's hungry

"We get like the mac and cheese, which is dehydrated cheese -- basically food that's no good for you health wise," she said. "Everything is high in sodium and trans fats ... and that's all we basically can afford. There's not enough assistance to eat healthy and maintain a healthy weight."

Advocates for the hungry say many people on the food stamp program opt to buy less-healthy foods because they can't afford fresh fruits and vegetables on such a tight budget.

Food stamp "benefits aren't really enough for a healthy diet," said Jim Weill, president of the nonprofit Food Research and Action Center.

Natural gas glut could hit U.S.

As many as seven massive natural gas export terminals are expected to start up overseas this year, expanding worldwide capacity by 20 percent and flooding markets with new supplies of the key power plant and heating fuel. Dozens of new tankers capable of carrying natural gas in a liquefied form are slated to hit the seas.

Just as these new supplies come on line, worldwide demand is expected to drop as the global recession deepens.

Operators of these new facilities are unlikely to cut back production, however, so shipments of liquefied natural gas will most likely head to the deepest markets with the greatest amount of natural gas storage capacity — the United States.

...The wave of imports might even be strong enough to challenge growing domestic natural gas production from various shale formations, including the Barnett Shale near Fort Worth and Fayetteville Shale in Arkansas.

“This can put pressure on U.S. gas prices and could delay the full development of some of the new shale projects,” Douglas said.

Global crisis casts shadow over Saudi’s futuristic cities

King Abdullah Economic City, or KAEC, is one of six planned “economic cities” designed to help promote private investment and so wean Saudi Arabia’s economy from oil and generate jobs. A tired policy mantra elsewhere, it has real urgency here. While the UAE is racing against the depletion of its petroleum reserves, Saudi Arabia is racing against its birth rate – about three of every five Saudis are under the age of 25.

But the global economic crisis has put an abrupt halt to the Gulf oil boom, and the easy money that came with it, casting doubt over whether KAEC and the rest of Saudi Arabia will generate enough private investment soon enough to defuse what many economists call a demographic time bomb.

Saudi buys 3 mln bbls fuel from Japanese trader

SINGAPORE/DUBAI (Reuters) - Saudi Aramco has agreed to buy about 3 million barrels of gas oil from Japanese trader Itochu, as rapidly rising demand for transport and power force the top oil exporter to import, traders said on Monday.

... The Kingdom of Saudi Arabia has bought gas oil on the spot market for at least two years. Aramco has avoided long-term supply deals as the Kingdom strives for fuel self sufficiency.

Demand has been fuelled by heavy investment in economic development financed by record crude export revenues. It also may have been further fuelled by the need to burn oil products in some power stations instead of gas as the kingdom cuts oil output.

Gulf projects shock: Spending may actually rise in 2009

Government spending is set to continue on priority projects: ones that increase gas availability and power and water production.

The following sentence will shock. More money may be spent on projects in the GCC in 2009 than in 2008.

Energy industry capital expenditure in the region totalled about $60bn in 2008, according to sources. The same sources forecast that the sector will spend almost $70bn in the year to come. Non-energy project expenditures, which amounted to about $200bn in 2008, may not grow, but they probably will not fall.

Tajikistan: New Year, New Energy Crisis

Until recently, most parts of Tajiksitan have had almost no electricity: only six hours a day. But at least what came during those six hours was steady. Now, the situation becomes worse.

Turkmenistan cut off electricity for Tajiksitan in the beginning of the year due to an ongoing disagreement between the latter and Uzbekistan on transit electricity prices.

UAE to donate 320MW power plant to Pakistan

ISLAMABAD (APP): United Arab Emirates (UAE) has offered to donate power plant of 320 MW capacity as a gift to the people of Pakistan to help overcome energy crisis.

Minister for Water and Power, Raja Pervez Ashraf has left for Dubai (UAE) on Monday to sign an MoU with concerned UAE authorities and to work out the detailed plan for implementation of the agreement for the dismantling, packing and shifting of the plant to Pakistan.

Home insulation plan would aid economy

An economic stimulus should reduce the risk of a long-term economic crisis, but it should not make our energy crisis worse.

A major investment in home weatherization might lack support from lobbyists and interest groups, but it will meet both policy goals.

Cities, towns ready to vie for stimulus funds

WASHINGTON — A high-tech power plant fueled by wastewater residue. A section of road that could ease rush-hour traffic woes. A 100-year-old school that needs wiring for the 21st century.

These are among the thousands of projects around the country that will be vying for money from Washington if the economic stimulus package — which has swelled to nearly $900 billion in the Senate — is signed into law, possibly within two weeks.

Arab analyst blames Opec for collapse in prices

A prominent Arab energy analyst has blamed Opec for the collapse in crude prices, saying the oil cartel has failed to fully comply with output cuts and kept sending contradicting messages to the already sceptic market.

Nicholas Sarkis, Director General of the Paris-based Arab Petroleum Research Centre (APRC), which acts as an adviser to the Organisation of Arab Petroleum Exporting Countries (Oapec), described Opec's behaviour in dealing with the faltering crude demand over the past few months as "suicidal."

PDVSA cash flow hit by crude price fall

CARACAS: Venezuelan state oil company PDVSA has built up debts with providers and skipped payments to some partners under the strain of falling oil prices, a sign President Hugo Chavez may face financial problems this year.

Deterioration of PDVSA’s finances may make it harder to stabilise oil production that market sources say is already falling and may force cuts in the billions of dollars PDVSA spends on social programs that sustain the leftist Chavez’s popularity.

The cash flow problems are among the first concrete effects of the oil-price collapse on Venezuela, where a five-year consumption boom continues even as the all-vital oil industry is being blindsided by collapsing prices.

Producer Spending Cuts May Shape Future Oil Price Rebound

Once demand stabilizes, oil prices could bounce back quickly. Cash-strapped producers have cut budgets faster and deeper than in past downturns, according to the oilfield services companies that are the recipients of much of that spending. The lack of investment is already speeding up the rate of decline in older fields, and delaying the start of new production. Service companies see a possible repeat of the last four years: During this period, prices rose to record levels as demand grew faster than new supplies, an imbalance that some in the industry attribute to a lack of investment during the previous downturn.

TABLE - Russian Jan oil output rises, exports fall

MOSCOW (Reuters) - Russia's January oil output rose slightly to 9.7 million barrels per day (41.01 million tonnes) from 9.66 million bpd in December, while exports via pipeline monopoly Transneft fell to 4.25 million bpd (18.0 million tonnes) from 4.36 million bpd.

The following oil production and exports data were supplied by Russia's Energy Ministry. The volume figures are in millions of tonnes and show the month's total and the year to date. Percentage change figures are based on daily volumes.

Iraq oilfields ready for revival, await foreigners

BASRA, Iraq (Reuters) - Next to a pipeline snaking across a desert in Iraq's south, villas built to house an expected influx of foreign oil workers stand empty.

Nearby, a faded plaque in Russian and Arabic commemorates the opening of a pumping station in 1972, a reminder of the foreign ties that helped Iraq develop its oil industry.

As U.S. President Barack Obama confronts the legacy of a war his predecessor launched almost six years ago, Iraq has once again begun to open its vast oil reserves to foreign companies.

China's natural gas output jumps to ninth in the world

China's oil and natural gas production in 2008 maintained double digit growth with an increase of 13.7 percent, according to the China National Petroleum Corporation (CNPC). This was the sixth consecutive year that China’s oil and natural gas production recorded double digit growth.

Ruble Falls to 11-Year Low as Speculators Push to Break Target

(Bloomberg) -- The ruble slumped to its weakest level against the dollar in 11 years as investors speculated Russia will be forced to give up its currency defense after draining reserves.

Brazil’s Real Weakens as Falling Crude Prices Hurt Trade Flows

(Bloomberg) -- Brazil’s real weakened for a third day as falling prices of oil, one of the nation’s top three exports, reduced trade flows to Latin America’s biggest economy.

“The real is very tied to the performance of commodities because the currency market is heavily dependent on export flows,” said Paulo Fujisaki, a foreign-exchange strategist at Socopa Corretora in Sao Paulo. Nearly two-thirds of Brazil’s exports are commodities.

Teachers aims at Petrocan

Long dissatisfied with what it sees as the oil company's poor performance, the giant pension fund is about to take a more activist role in Petro-Canada.

Kuwaiti companies will need to restructure or consolidate in 2009 to attract much needed capital and emerge stronger

The Kuwaiti business landscape has dramatically changed over the past few months affected by the world’s liquidity crisis, deteriorating oil prices, postponed infrastructure projects, and the lack of an immediate and clear domestic stimulus package addressing many of the country’s ailing but vital economic sectors including financial services and building materials.

Wind turbine firms feel downturn's pinch

Last summer, wind turbine manufacturers couldn't make parts fast enough to meet demand. Now, industry executives say, financing has all but disappeared because of the economy, causing some planned projects to be put on hold. Unless there's a robust economic rebound, or the government steps in, they say, construction of wind turbines nationwide will be set back, and the companies that make turbine parts could be forced to cut jobs.

Lithium deposits could power long-exploited Bolivia's future

Government officials think that Bolivia possesses the world's biggest lithium reserves, and they also think that the country is poised to profit big-time from the automakers' push to develop electric cars that will run on lithium ion batteries.

Obama’s Billions for Energy Fuel Stanford, MIT Research Dreams

Researchers at U.S. universities, led by Berkeley, Stanford University and the Massachusetts Institute of Technology, are targeting the $2 billion in energy research funds contained in the House recovery bill. The research dollars will produce jobs, reduce U.S. dependence on foreign oil and stem the production of greenhouse gases, according to the Association of American Universities, a group of 62 schools that conduct research.

Carmakers fear emission plan could ruin recovery

SACRAMENTO – When President Barack Obama moved to increase gas mileage and curb tailpipe emissions last week, the leaders of the battle against global warming rejoiced.

But his directives could steer automakers and the buying public down a bumpy road.

Along the way, critics warn, near-insolvent automakers will be forced to invest billions in new technology all the while hoping higher sticker prices and more-limited selections don't scare customers away from showrooms.

Project envisions post oil Vegas

The goal was to address social, economic and environmental problems in Las Vegas and answer how they can be addressed for the year 2016 when the global supply of oil will be steadily declining. Lee-Anne Milburn, an associate professor at UNLV explained that “the whole idea was that [the groups] had to look out to 2016 when we are running out of oil…They [were] supposed to figure out how we need to redesign Las Vegas to deal with the fact that we’re going to have less oil, less ability to drive.”

City decides to test cycle lanes on Burrard Bridge

The City of Vancouver will temporarily close up to two lanes on the Burrard Bridge this spring while it tests designated cycling lanes on the crossing.

The tests will look at the safety of both cyclists and pedestrians, who now share the bridge sidewalks, and how the reduced lanes affect traffic.

Melting Arctic Prompts Calls for 'National Park' on Ice

With arctic sea ice melting like ice cubes in soda, scientists want to protect a region they say will someday be the sole remaining frozen bastion of a disappearing world.

Spanning the northern Canadian archipelago and western Greenland, it would be the first area formally protected in response to climate change, and a last-ditch effort to save polar bears and other animals.

Dispatches from the frontline of a mission to save the world

The Centre for Climate Change Economics and Policy was recently launched at Leeds University to drive forward the green agenda. Here six of its top scientists discuss the key issues.

Rising sea salinates Ganges - expert

KOLKATA (Reuters) – Rising sea levels are causing salt water to flow into India's biggest river, threatening its ecosystem and turning vast farmlands barren in the country's east, a climate change expert warned on Monday.

It's Time To Adapt To Climate Change, Scientists Say

In the United States, most of the debate over climate change is focused on how to reduce greenhouse gas emissions. But some environmentalists say we're talking too much about how to prevent our climate from changing -- and not enough about how to adapt to change that's already here.

Looking at the Windpower finance story, I was puzzling over what can help stabilize the fortunes of these businesses to weather the peaks and valleys (Gusts and Lulls?) of this fickle market?

Without attending to the 'yah, buts'.. I was wondering whether a turbine producer would get any benefit from also investing in some windfarms of its own, since the demand for electricity could provide a more stable cashflow against the turbulence (sorry) of the turbine business.

Of course, in the immediate-term, they would simply be servicing the debt.. but we're trying to leverage in Long-Term Positions over a perennially short term market philosophy, right? (IE, if it was easy, everyone would be doing it.)


The other angle that keeps nagging at me is based on the model of getting a Bosun's chair going on a foundering ship, where you start by tossing a small line, and use that to pull over the heavier rope. To start a wind installation with rough financing, can you devise a model where you start with smaller, cheaper equipment that has a fast payback,(?!) and let that start the cashflow to help with the progression of the project.

In other words, can you start small and work progressively?* I know we've built our infrastructure on a 'full steam ahead, and pay over time' model.. but are there ways to make a slow build, which would maybe have fewer employees working in a longer timeframe?

Just playing with ideas..

*(or in other words, to take advantage of the exponential function?)

In other words, can you start small and work progressively?*

Alas no.

Cables have to carry current - and that needs to be sized. Why dig up/replace undersized cable?

The land needs leases signed. If you don't pony up - then others can come in, put up their turbines and then whine about access to your powerlines/buildout. (your expense, their benefit) Land leases 2K-35+k

If you are going to have a local warehouse of parts, the building/employee(s)/Internet back to SAP all become cheaper per watt served when you serve out more watts.

eric blair -

Well, I think that within certain limits you CAN start small with wind and work your way up to full capacity, though (as you correctly point out) there will be some economic penalty in doing so.

One of the nice features of wind power is that it lends itself quite nicely to being modularized, obviously because of the practical upper size limit of individual turbines. Thus, it can make sense to build out a wind farm in phases, say going from an initial 100 turbines up to a final design of 300 turbines over a period of several years. Of course, in most cases all of the land has to be acquired/leased at the very beginning, as does the setting up of power connections. Thus, unit operating and maintenance costs will usually be higher the smaller then number of units.

Yet, I think in many cases this penalty is worth paying because it can make a project much easier to be initiate, both in terms of spreading out the financing and gradually increasing the fraction of wind power feeding a particular grid. There are certain advantages associated with not having to make a total GO/NO-GO decision as in the case of building a new nuclear power plant.

Thanks, Joule;
I also think that my suggestion would have to look at other boxes to think outside of. There is the assumption that a 'Project' has to be at a great, contiguous site to fit the 'WindFarm' model.. while instead, it might make as much sense to model a generation scheme with leased or tiny purchased lots for individual turbines throughout an actual Farmland, so that the Wind company doesn't need to acquire enough land to satisfy the spacing requirements between turbines.. a significant cost savings, I would think, if it were zonable and insurable.. Also, one could develop a combination of Generation and Transmission together (along a proposed Rail ROW corridor, perhaps as well), so that the needed distances between turbines worked doubly to cover the transmission distance to some degree, instead of creating a mass of Single-Use property, that then has to add a transmission leg to reach the nearest grid points..

Good point. Two more.

You can't get a permit to build unless you show what the building/farm is going to look like when it's complete. No jurisdiction will allow you to build one floor at a time and come back later.

Second, in the US anyway, everytime they "expand", they'll have to get another EIR done.

Too much money spent on constantly replanning and repermitting.

The fact is, these systems do pay for themselves. Unfortunately, a GE won't earn 5% on an investment because it dilutes the 15% they earn on defence contracts. They tried to sell there appliance business a few years back even though the business was profitable. It just wasn't profitable enough. My array has generated 17500 kw in 3.5 years. It will clearly pay for itself, just not by the end of the quarter. Fortunately, I have only one shareholder.

"Day Two - Not buying anything! Please join today."

jteehan -

Depending on the specific circumstances, large industrial or utility type projects do not necessarily have to start all over again from scratch regarding the regulatory process every time an expansion or addition is added. Very often the initial permitting can be done on the basis of the final completed built-out phase, with the understanding that the project will be built in several phases over a period of years. For example, a wastewater discharge permit can be based on the pollutant loadings anticipated for when the industrial facility is built to its final capacity.

It is when these expansions or additions are not planned for in the initial permitting where a lot of subsequent wasted motion can result. Nevertheless, in general one will have less regulatory headaches with a one-time-only type of project as opposed to one built in phases. Still, that additional aggravation and cost must be weighed against the advantages sometimes realized by doing things in phases. Which makes it essential that you fully understand the regulatory environment you are operating in and what can and cannot be easily done within such an environment.

Thanks, Eric;

Of course, I tend to take that kind of a 'No' as just meaning "Yes, but to a different question.."

If these things will, pretty much on their own continue to generate energy and hence, revenue.. then there must be a way to leverage this and grow it.

If I think of something really brilliant .. I probably won't post it. But this much I think is worth sharing.

To start a wind installation with rough financing, can you devise a model where you start with smaller, cheaper equipment that has a fast payback,(?!)

That runs into serous trouble with economy of scale effects. Larger turbines have shorter payback periods. There is a reason that the capacity per turbine is now in the 2MW plus range. Then even for a fixed size turbine, there are economy of scale of production (number of turbines built per year) effects, and the learning curve for the workforce etc. So I think the bottom line, is that the industry is not viable until it reaches a certain size.

We see this effect especially severely with solar thermal. If you believe the numbers from the government review (IIRC it was a Sandia lab report), once industry capacity reaches a few HW (of new nameplate capacity) per year, the electricity will be competitive. But, right now, without the economy of scale working for you, the investor who builds a solar thermal plant is taking considerable financial risk. Note AUSRA just announced a 10% layoff. Plans for the near term deployment of significant solar thermal capacity in California, and neighboring desert states are being delayed and scaled back.

The only way to overcome this chicken and egg problem, is to have deep pocketed investors, with a long time horizon. Lacking those, it requires government subsidies (or direct investments) to nurture such industries to the point where they can be financially self-sustaining.

"deep pocketed investors, with a long time horizon. "

But I don't think that is the ONLY way. Big and Expensive and Expansive is the way we've defined energy production, precisely because that is the kind of energy we've built this Industrial Paradigm with. That kind of size and financing give you clout, but brings to mind William McDonough's 'motto' for the industrial revolution. "If brute force doesn't work, use more."

If you want to outclass the dinosaurs, you might have to opt for light, nimble mammals with hot blood. They may be less efficient by one measure, as in unable to get the highest coconuts without expending huge energy to get up the tree and crack the nuts, while the Therapods just swing their long necks up there.. But the little weasels can burrow (or borrow?) more easily, too.

The advantages might not be visible unless one gets down on hands and knees and thinks smaller for a spell.. but I think it could be instructive to root out some of the possibilities down there. (Maybe it's also to have a 'Megawatt' Turbine producer also diversified into the Kilowatt Turbine business).. but I like the idea of creating income streams with your own installed capacity, too, which gives your crews some work through a slowdown.

Best, Bob

A Fable

The mountain and the squirrel Had a quarrel,
And the former called the latter 'Little Prig.'
Bun replied, 'You are doubtless very big;
But all sorts of things and weather Must be taken in together,
To make up a year And a sphere.
And I think it no disgrace To occupy my place.
If I'm not so large as you, You are not so small as I, And not half so spry.
I'll not deny you make A very pretty squirrel track;
Talents differ; all is well and wisely put;
If I cannot carry forests on my back, Neither can you crack a nut.'

Ralph Waldo Emerson

I doubt a KW wind turbine would have an EROEI greater than one. Some enterprises are only economically viable above a certain size limit. Perhaps as the technology is optimized, smaller unit size is possible.

In this case, I'd be talking ROI more than EROEI, since it's intended to keep cashflow moving when, like now, the big orders have largely stalled out.

Even the much-discussed 'Payback' is a tricky balance to get over-worried about, when you're talking about equipment that can double as emergency power, which seems all-but impossible to valuate. I mean, do we ever expect to get 'Payback' (in full, anyway) when we take out insurance? No, it's simply an expected cost. The small wind and solar installations are much the same, while still held up (unfairly, I'd say) against the expectation of fairly quick payback on terms dictated by a 'normal economy'.. I mention it, since this is the same equation I'm positing for manufacturers that face doom every time the energy markets chase them out of the economy and so many go belly up.

What could you design into your business model that would stabilize your company as we head into this period of fluctuations, so you don't get shaken to pieces from it?

I had to look up the EROEI issue, just the same.. the variables make these numbers pretty woolly for small turbines, but the fact that they can be viable with a VERY broad range of input materials ( www.otherpower.com )does a lot to make them more accessible, and possible to build from recycled materials as well.


Here's one review of some wind EROEI studies, plus a TOD reference..

a German study at Munich's Technical University, by far the most extensive at the time, examined the energy payback of wind turbines from 10 kilowatt to 3 megawatt in size.(2) The results of the three studies are comparable: medium-sized wind turbines installed in areas with commercially usable wind resources will pay for themselves easily within one year. At 7 m/s (16 mph) sites, like those on the North Sea coast or in California's mountain passes, turbines will return their energy content in 3-5 months, and at sites typical of North America's Great Plains in 4-6 months.

..A 2006 summary of all the reports and studies to date was compiled by Cutler Cleveland at Boston University. Cleveland's analysis was posted on the Oil Drum October 19, 2006. ( http://www.theoildrum.com/story/2006/10/17/18478/085#more )

While it isn't a silver bullet, a consistent regulatory environment in the US (primarily consistency in tax breaks and other incentives) would be very useful in stabilizing the wind industry. Jerome has written extensively on this. The government could also provide a secondary market to buy loans made to build wind power and related infrastructure (modeled after its purchasing of student loans, etc.), which would minimize the impact of credit issues on wind. While I have issues with this second suggestion, if the government is going to spend a given $100 billion providing a secondary credit market, I'd much rather they do it to subsidize wind than housing...

IMO...a consistent regulatory environment is never going to happen in the U.S.

Much of the unease in the financial markets now is because they don't know what the government is going to do next.

The current mess was caused by poor investments, not uncertainty about future investments.

The fact is, in my opinion, the US regulatory environment was extremely consistent in that nothing was enforced anywhere. You can't get much more consistency than that, yet here we are.

Let me ask it this way. Did you cash out your IRA because of unease about government regulation? Or because the market is going down faster than January Christmas Tree futures?

Did you cash out your IRA because of unease about government regulation?

YES!!!!!! Yes, yes, a thousand times yes.

If not for that, I could have just rolled it over into cash.

It's not the market. It's that the rules may be changed without notice. There's talk of the government seizing IRAs and forcing them into government bonds. Seem far-fetched? So did the ban on short-selling.

I want more control over my money than an IRA can give me.

I don't see how anybody can expect to make money in a market where the rules change weekly or even daily without prior warning, unless you happen to have inside information. The actions often seemed to directly punish some investors for the gain of others, when the day before both were acting legally.

There is no pile of money that the gov't won't eventually talk themselves into regulating, sucking dry, and/or sequestering. I thought this about 401K plans for over a decade now -- long before the current crisis -- due simply to the inevitability of a crash caused by baby boomer extractions.

Leanan... did you cash out, as in pay the penalty and income tax (if it was a traditional IRA)? Curious as to your conversations, if any, with your broker. I am waiting for mine to call me back today.

Also, does anyone know whether an employee with a 401K can withdrawal (as in close out) the funds while still employed?

It was a Roth IRA. I'll probably get a deduction.

No conversations with broker. Don't have broker.

Just talked to my acct. She said I could withdraw my 401K without penalty [ but taxable as income] after age 59 1/2.

Before 59 1/2 , there is penalty plus tax.

Her opinion is the effective seizure of 401K is unlikely and would wreck the economy. I think otherwise.

It won't be seized, it'll be regulated into another zombie, IMHO. The argument will be that the stock market is too volatile and too amoral, and the gov't will re-balance the portfolio with a nice mix of gov't and municipal bonds, plus some holding that are for the public good (maybe worthwhile stuff like wind to begin with, and then pork as the program matures).

Maybe sometime later the markets will stumble further, and US bond rates will be up, so the balance will shift further "for the good of the investor". Eventually somebody will come up with the bright idea of "bonus money" for playing certain gov't favored games, extra fees if you have too much money in your account, and then what you get out won't really be the same as what you invested in. At the point that the 401Ks get "borrowed" into fiat accounts, they'll be unrecognizable from social security and the markets and economy will have long been wrecked anyway.

I agree with your accountant. There is not a snowballs chance in hell that the government will seize 401Ks. She is correct, it would wreck the economy. And let's not get paranoid because of the rantings of a couple of congressmen. They are a few idiots in there that are always making ridiculous statements.


I have been wondering about this myself. I have moved about 75% of my 401(k) into the "Stable Value" fund option, with another 15% in the bond index fund early last year. I would rather have the cash at this point, but I think that would require leaving the company.
If you think you will be laid off soon, like this year, you could look into getting a loan against your 401(k). You get the cash, but then have to pay some back to yourself with interest every pay period while waiting for the ax to fall or for your 401(k) to tank or be "repurposed". ;-)

Getting to the party late, but...

Most, if not all, 401k plans will not allow you to make a distrubution while still being employed. Some make exception for disability, various hardships, etc.. If you have questions you are entitled to see a "summary plan discription". Might be easier to ask the administrator or a HR person.

I have dealt with a few plan trustees and argued they need to have a cash account or some sort of guarenteed investment as a choice. But legally they can do what they want.

I own a small cpa/financial planning firm in Indiana that serves clients nationwide. With a little common sense and help from you folks I have been preaching "go to cash" since early last year. You should see the looks of disgust I get from colleagues. But the clients are pretty darn happy.

Let me know if I can help.

Can you really serve clients nationwide?

I thought laws differed so much state to state that you had to get a local financial planner.

State accounting laws can get tricky, but as far as financial planning goes, yes.

We have a unigue niche market. Clients come from as far as Seattle and Boston because we know their industry.

Been doing this for 15 years. Small sample size (we have around 90 clients) but I haven't seen retrenchment like this before. It seems that people really think (thank god) that this time is different. May not help 10 years down the road based on what some folks think around here -- and I tend to agree -- but at least they won't be completely blindsided.


Just out of curiousity, why would the government sieze the IRAs in exchange for bonds when people are already tripping over themselves to buy more bonds? Seems to me that would be the last place the government would want to put money since US bond buying is the main reason for the corporate bond slump in the first place.

I'm not arguing its a far-fetched idea. It's just that I at least understood the temporary ban on short-selling of banks. But for the life of me, I can't see the reasoning for the IRA thing. IRAs still have trillions in stocks that would need to be liquidated. Seems to me at that point its game over anyway and non-edible assets no longer matter. It would be easier to just remove the penalties for withdrawals and people would drain and spend us back to prosperity in no time. Until next year anyway.

I guess I wouldn't be surprised. I suppose a lot of people wish the US had done just that last year :)

It's hard for me to get my arms around not just going along with BAU. Unless you're converting all your assets into seeds, non-perishables, tools, and ammo, it won't matter whether you have cash, bonds, stocks, christmas tree futures, or anything else currently offered by the BAU system. To me, one might as well just play the game until the end and take it from there, or one needs to go all in, or all out as the case may be.

You're still one of my favorite people because of the work you do here. So while I may not agree with you on everything, you're still welcome to stop by for dinner any time you'd like.

It's hard for me to get my arms around not just going along with BAU.

Me, too. That's why I waited so long. I've been thinking about it for over a year.

Unless you're converting all your assets into seeds, non-perishables, tools, and ammo, it won't matter whether you have cash, bonds, stocks, christmas tree futures, or anything else currently offered by the BAU system.

I disagree, obviously. I think Stoneleigh is right: cash will be king, just as it was during the Great Depression.

To me, one might as well just play the game until the end and take it from there, or one needs to go all in, or all out as the case may be.

I'm still hedging, in a way. My family is doing the BAU thing. If BAU continues, I can fall back on them. Similarly, if this ends up being the Greater Depression, I will likely end up supporting them. Which is fine. That's what family is for.

I too have taken out some of my IRA (10% for now with more soon). I figure that if the worst case scenario happens I'll want the cash. If by some magic BAU maintains for the next thirty years (I'm 33 now), then I'll have time to save more at a later date. I take a penalty plus the taxes, so it's like buying insurance for a SHTF future.

cash may be better than other pieces of paper for now but in the end it's also just pieces of paper, not water you can drink, not food you can eat.

That's true, but what else am I going to do? Canned goods don't last forever. And they're not very portable, if I have to leave in a hurry.

Just diversify a bit. Some cash, some gold, some silver, some guns, some ammo. All of it holds values pretty well, and all are portable.

You could buy real silverware and live like a duchess, using your silver savings daily.

There's no reason not to invest in a month or two of food, too. If you have to leave, it's small enough to walk away from, and if you have a local emergency it will really help.

Tools and such can be a good investment too, for the handy. They're useful now, and if you stay they'll be more useful and valuable later. Most are somewhat portable, moving van style, though not in a "grab a bag and run" style of departure.

I guess the problem is different if you're working on getting a year's income in hand, like I am, versus $1M in retirement accounts. For larger amounts I'd look at some land, some gold (partially held overseas), maybe some short T-bills, and a few cash accounts spread around.

Converting cash to skills -- going back to trade school -- is a good 'savings plan' too.

I've considered all that. In fact, I'm on the record as saying the best investment is in skills/education, because it's the only thing that can't be taken away from you.

I'm not keen on investing in real estate. For one thing, I'm expecting it to get cheaper. I don't want paper gold. Like someone here said, that's about as useful as a picture of a lifeboat. I think "things" like tools will likely get cheaper. Like Kunstler said, we're Garage Sale Nation. People will be selling everything they can just to raise cash.

I do have some tools, food, etc., but if things get that bad, I probably won't stay where I am. I don't have roots here. I rent, and so am not going to spend money on insulation or solar panels.

I know I'm preaching to the choir. :) Maybe the back-sliders in the distant pews will hear and take note, though.

I waffle on real estate. I think it doesn't hurt to have a paid-for place you think you can live in, as long as the taxes and such aren't too bad. Like you say, it's a place to invest in solar panels and insulation, too.

I do think real estate will get a lot cheaper, but I'm not worried about losing equity in paid-for property. Who cares if I lose 50 or 75% if I have a solid place to live, or a place to rent out for a few bucks of much-needed income? I'd still be way ahead of those who are foreclosed and lose ALL their equity.

I also know I tend to be impatient. I probably won't get the best deals.

I can't afford to pay in full for property in a place where I would want to live. And I don't want to take out a mortgage.

When TSHTF, I will probably want to be with my family. Right now, they are living in overpopulated, overpriced, unsustainable places, or I would have moved to be nearer them long ago.

Leanan, can you provide a link to Stoneleigh's analysis/reasoning on the cash-is-king conclusion? Thanks.

The side-bar primers on the TAE (The Automatic Earth) will detail the overall thinking, but the basics are pretty simple.

  • http://theautomaticearth.blogspot.com/2008/11/debt-rattle-november-29-20...
  • We're in a deflationary period as debt implodes, and the amount of debt to be defaulted is so much bigger than the gov't stimulus spending (which is also debt) that it can't keep up. The rest is standard recession/depression dynamics.

    The Federalist quote for the day:

    "We must not let our rulers load us with perpetual debt."

    --Thomas Jefferson, letter to Samuel Kercheval, 12 July 1816

    If only our rulers and people were as wise this century!

    The right-hand sidebar primers on the front page at TAE pretty much cover my position on deflation and the need to hold cash. Check out Inflation Deflated, How to Build a Lifeboat, The Special Relativity of Currencies, From the Top of the Great Pyramid, Markets and the Lemming Factor and Energy, Finance and Hegemonic Power. The Resurgence of Risk (also listed there) is a longer piece - a TOD:Canada post from August 2007 that explained my view of the credit bubble and where we would be heading.

    Here are a couple of other pieces that describe the nature of our credit economy and why traditional money supply measures don't give an accurate picture (ie why we are NOT headed for hyperinflation):

    The Roving Cavaliers of Credit by Steve Keen

    Here It Comes by Karl Denninger

    Appreciated, Stoneleigh.

    However, currencies can't buy time. The longer people wait to convert to hard assets, the less time they have to learn how to use those hard assets. The money-to-asset conversion will represent a radical change in lifestyle for most people, not to mention steep learning curves and mistakes.

    You are in agreement that people would eventually have to convert cash to physical infrastructure. So is it better to begin making mistakes with a new paradigm and climbing the learning curve earlier or later?

    However, currencies can't buy time. The longer people wait to convert to hard assets, the less time they have to learn how to use those hard assets. The money-to-asset conversion will represent a radical change in lifestyle for most people, not to mention steep learning curves and mistakes.

    You are in agreement that people would eventually have to convert cash to physical infrastructure. So is it better to begin making mistakes with a new paradigm and climbing the learning curve earlier or later?

    The learning curve is of course an essential part of the equation. For those with plenty of money there is no reason not to get into hard assets now and start learning to use them, although you still need a substantial cash cushion. You will take a loss, but you can afford to do so, and the time you will have bought yourself is indeed valuable.

    However, for most people this isn't really an option. They don't have the resources to pay today's prices for a homestead without getting into a debt that will cripple them, and probably result in them losing the property anyway. For those with fewer resources, the answer is to preserve your purchasing power as liquidity now and wait until you can purchase at a lower price, with the exception of some smaller things that are not too expensive now and may not be available later (such as water filters). The balance between liquidity and hard goods, and between money and time will vary with individual circumstances.

    We often suggest pooling resources with others in order to be able to get further down the to-do list given in How to Build a Lifeboat. When you work with others you can buy yourselves more time as you will have more money. Doing this could also give you a much broader skill base and a support structure, both of which could be vital.

    Yes, but. Real estate is only one part of the equation. And while you mentioned water filters as a small investment in infrastructure, there is one area frequently overlooked with how people are able to prepare: skills.

    Most people have enough money to take a class in CPR, gardening, carpentry, metalworking, etc. Most people have enough resources to learn influence and leadership practices, and to begin practicing a different kind of human interaction and tearing down the boundaries in existing communities.

    The Internet, while available, contains much useful knowledge, which can be assimilated for extremely low economic cost, only the investment of time and effort.

    Community, land, water, supplies, food, infrastructure, skills, knowledge. These are all necessary, and the abstract value of cash at any budget size can begin converting to these things which actually generate real value.

    I'm all for encouraging the learning of skills. Clever hands will be a great thing to have, along with a well-informed and agile mind and realistic expectations. As you say, it need not cost an unreasonable sum of money.

    Cash gives you flexibility in the face of uncertainty by preserving your purchasing power through the worst of the deleveraging. It isn't a long term solution, but it's necessary in the short term to medium term, and you have to survive that in order to have a long term to worry about. However self-sufficient you are there will still be things you need to buy, and even if you own your property outright you will still need to be able to pay skyrocketing property taxes, as municipalities desperately try to fill the gaping holes in their budgets by squeezing the pips until they squeak (to borrow an expression from a past Labour government in the UK). The cash you preserve now will go further than you would ever have imagined possible.

    Cash is efficient and the opposite of resilient. It is abstract and easily misunderstood. It is ephemeral, as opposed to durable. It is the electricity and the wire, but it is not the generator.

    And if by "further than you would have ever imagined possible" you mean that it could go straight into a black hole, quite true.

    Our monetary system is poorly analyzed and described by a normal-curve-dominant way of thinking. Conditions in which you would otherwise rely on cash will change not gradually as might be expected with a Gaussian distribution, but abruptly with little or no warning.

    What cash replaced were mutual agreements, aka barter. Learning to do without cash is learning how to engender mutual agreements. It takes learning, practice, and time, but it's not rocket science. And it's definitely more resilient than cash transactions.

    Learning to do without cash is learning how to engender mutual agreements. It takes learning, practice, and time, but it's not rocket science. And it's definitely more resilient than cash transactions.

    Learning to do without cash is great, but you won't be able to get by entirely without it. As ephemeral as cash seems, it will be worth a lot when there's very little of it in an economy that will have to make do without credit. If you can afford it, I suggest balancing cash reserves and self-sufficiency (after getting out of any debt you may be carrying of course).

    Believe me, I'm no enemy of self-sufficiency or weaning one's self off the need for cash. I own a homestead kitted out with renewable energy infrastructure myself, and have been learning to provide for my family as much as possible over the nine years I have been preparing for this.

    Thanks, Paleocon. I also found this, The Special Relativity of Currencies. Reading this, I think there is a disconnect.

    During the deflationary phase you will need liquidity, but once it is over you will need to switch to hard assets. I would suggest waiting for very substantial price falls in order to hang on to as much of your wealth as you can, but not to wait for the bottom. -- Stoneleigh

    So, no, it isn't that cash will be king, it's that cash is king now. And soon, the king will be the hard assets, skills, infrastructure, community, land, and resources needed to generate the actual things which humans value (food, mutual support, more people).

    However, she doesn't give enough of a warning in saying, "not to wait for the bottom". It is first ridiculous to think that the unfolding chaos in the markets can be remotely timed in such a fashion, when even the timing of investments when things are going well is nearly impossible. You are never going to know, except in hindsight when it's too late, whether you are near a bottom. Second, waiting around too long may mean the market in whatever your interested in collapses entirely, and no asset acquisition can take place for any amount of money. Third is abrupt monetary collapse, where existing money becomes useless in favor of barter or a new monetary system independent of the old.

    Hanging on to that abstract wealth in favor of the physical things which actually generate value, may mean the abstraction fails and the wealth vanishes faster than you can say "was it inflation, deflation, or other?"

    We are already in a deflationary spiral. So if you have the cash, begin converting it to hard assets now.

    Before the markets for what you need become chaotic. Before the tool of money breaks. Before more people realize how much is durably real and how much is ephemeral fairy dust.

    So, no, it isn't that cash will be king, it's that cash is king now. And soon, the king will be the hard assets, skills, infrastructure, community, land, and resources needed to generate the actual things which humans value (food, mutual support, more people).

    Not necessarily "soon." Deflation can last for a long time. The Great Depression lasted 10 years, and it was WWII that ended it. I think it's entirely possible that this will be worse than the Great Depression, and the accompanying deflation will last longer. Possibly a lot longer.

    However, I agree that it won't last forever. That's another reason to be in cash, IMO. So you can move quickly if circumstances change.

    Yeah, Leanan, I know you're on that inertia idea. Tell me something, have you ever seen a person age in reverse? Because that's exactly what you're expecting. That the complex system we're dependent on will somehow de-evolve into simpler systems. It doesn't happen that way. It will instead collapse and re-build. Read "Chaos: Making A New Science", by James Gleick, check out the "Chaos" lecture series by The Learning Company.

    Staying in cash in case circumstances change? And if the change in circumstance is that there is no longer a market for what you wish to buy with cash? And if the cash becomes worthless?

    The Great Depression was a temporary monetary failure. This is a systemic fundamental infrastructure failure. That was a hangover. This is being riddled with bullets while already having cancer.

    Stop compartmentalizing and being linear. This "cash is king" idea doesn't incorporate nuclear war, climate chaos, overshoot and die-off, the Holocene extinction. And, see, here's a learning curve that has to be climbed, acquiring the understanding of the real generation of value, mutual support, and that which can be called "community" or "society".

    That generation does not happen with cash. Cash is only the electricity. YOU are the generator. (And your skills, tools, resources, good looks, what-have-you.)

    The longer you wait, the fewer tools and declining support you will have available to climb the learning curve. Now is not the time to be lazy.

    Staying in cash in case circumstances change? And if the change in circumstance is that there is no longer a market for what you wish to buy with cash? And if the cash becomes worthless?

    Then I'm no worse off than I would have been leaving it in the stock market, am I?

    What good will seeds and tools do me if there's a nuclear war? The climate will probably change so much that good farmland becomes bad, or at least the seeds you thought would be useful will no longer grow.

    If things get as bad as you say, I will want to be with my family, even if it's just to die together. I will not be able to bring farmland or tools with me to join them.

    I'm with Greer on this. Planning for something so outside of BAU is pointless. All you can do is prepare to improvise.

    Fallacy of the excluded middle. You can do better than that, can't you? You've assumed "nuclear war" means all-out, balls-to-the-wall destruction. What if it's limited and on the other side of the world, only a billion people die, and then society collapses? Cash would be worthless, yet your skills, supplies, and infrastructure are intact. As would be your ability to support your family.

    Greer is also lazy. And you aren't preparing to improvise. You're preparing to get trapped. You propose a lifeline dominated by cash. How extremely and mind-bogglingly efficient. What have we learned about efficiency and resiliency?

    You will need to be resilient to improvise. Remember the saying about the money, a different lifestyle, a camel, and the eye of a needle? You are a camel. Get rid of the hump, and you will be resilient enough to squeeze through. Then if you want you can re-inflate your hump on the other side, though it's kind of an eyesore.

    The abstraction of value in favor of real value will destroy many lives and many "fortunes". Yours, too, if you don't pay attention or blink at the wrong time.

    In my view, any nuclear conflict limited enough to not cause worldwide calamity would not be enough to cause collapse. Alternately, we could have a collapse without nuclear war (just from climate change).

    You propose a lifeline dominated by cash.

    Why do you say that, when I have repeatedly said that skills are the only thing that can't be taken away from you?

    We happen to be talking about cash right now. That doesn't mean anyone here sees cash as the answer to life, the universe, and everything.

    I am with you on skills and community, but those don't have to cost much. Unless you're suggesting I use my cash to get a degree in nuclear engineering, so I can be a bomber rather than a bomb-ee.

    Leanan also has invested in social capital. There are probably thousands of people who'd give her a square meal and place to stay, an escort to the next city, or a leg-up for any job in the offing, just due to her work here at TOD.

    Cash is part of the answer, but not all. Besides everybody knows the answer is 42. :)

    42! Always trips me up. :)

    "On the other side of the world" is about right. If I lived in the US and wished to stay there I would do everything I could now to find a place that looked smelled and sounded like a village in a less developed country. Some backwoods middle of nowhere place, but somewhere with a creek. I would buy a cheap piece of land there and set up a mobile home (one without formaldehyde!) and I would start to live like I was poor (actually I would not have a job so I would probably really be so.) I would get chickens and make friends with the locals.

    If I didn't mind leaving the US I would go and find a village in a less developed country (probably better access to healthcare, and fewer problems with authorities trying to collect taxes) and do the same thing but not buy land, maybe just move in and start living on the edge of poverty.

    The key (no matter which country) is there should be water and some agriculture around you. Even if you know NOTHING about farming, once you live in a place with agriculture, you can join in the fun by trading for food, being asked to help when machines aren't running, marrying into a landed family, etc. Don't care if your friends suddenly wonder if you're insane when you say you've moved to the middle-of-nowhere. Just go where food can be grown and you can try to get a share of it sooner or later.

    Remember, we ARE yeast and we should do what any self-respecting YEAST would do: flock to the new energy source when the old one fails. And you should do it early.

    I can understand doing that, and believe me, I've thought about it. But it's not without risk. Climate change, for example. Steven Chu thinks agriculture in California may die due to climate change. If you put all your resources into a small farm, and the climate changes so you can't farm anymore, you're screwed. (Which is pretty much what happened to the Dust Bowl farmers.)

    Also...I've lived in small, rural towns like that, and you're always an outsider if your grandparents weren't born there. IME, one lifetime is not enough time to become part of the community, even if you're demographically similar. And if you're not - a gay atheist in a town of conservative Christians, say - it's worse. Look at what happened to the Japanese-Americans on the west coast during WWII. Their farms and their possessions were taken from them. Pearl Harbor was just an excuse. White farmers in the area had been lobbying for it for years.

    I feel the same way about leaving for another country. It's tempting, but I know I'd always be "the foreigner." And if TSHTF, that's not what you want to be.

    Mike Ruppert moved to Oregon, and then to Venezuela, but in the end, went home to LA. Unsustainable as it is (and he very much knows it), it's home. It's where he fits in and has community ties. I think a lot of people will end up doing that.

    Yes, cash is king now. The 'will be' started way back in 2007 and before, and it's still good advice, IMHO, for those who are in equities and other investments that carry debt. For example, I still have some real estate to consolidate since I was late to the TAE party and am only now well underway, getting out of more properties with mortgages into fewer properties without mortgages.

    The key point is that debt is bad and cash is good during deflation. Certainly converting cash to other valuable assets -- tools, skills, land, etc. -- doesn't hurt, and you can start early and finish late versus trying to "call the bottom" only to find out the store shelves are empty. Stoneleigh articulates this point as well, just perhaps not in every thread.

    For me, it's not about earning a return, but simply preserving some modest wealth and converting some to useful possessions.

    So, no, it isn't that cash will be king, it's that cash is king now. And soon, the king will be the hard assets, skills, infrastructure, community, land, and resources needed to generate the actual things which humans value (food, mutual support, more people).

    Cash is indeed king now, as it has been since the credit crunch began (arguably in February 2007). I expect it to remain so until the deleveraging is over, which could be a number of years. Deflation and depression are mutually reinforcing, so a downward spiral is unlikely to be a short-term phenomenon. During the Great Depression, people hung on to every penny, never knowing when they would earn another. Right now people have an unrealistic view of what they need, as opposed to want. Buying later will sharpen the sense of what is truly worth parting with precious cash for.

    However, she doesn't give enough of a warning in saying, "not to wait for the bottom". It is first ridiculous to think that the unfolding chaos in the markets can be remotely timed in such a fashion, when even the timing of investments when things are going well is nearly impossible. You are never going to know, except in hindsight when it's too late, whether you are near a bottom.

    Timing the market, probabilistically at least, is more possible than you suggest, but in order to do so you have to take a radically different view of the nature of markets than the received wisdom one (see Markets and the Lemming Factor in the primers section). Markets are driven by human herding behaviour, and that is what makes them predictable to a certain extent. For more on this, check out Bob Prechter's work on socionomics.

    My view is that we are beginning another leg down that should lead to a fear-driven spike low (probably in this quarter IMO), followed by a substantial rally correcting the entire decline from October 2007. It could last a number of months and should end at about the point where people are beginning to believe that the credit crunch is over (and patting Obama and his team on the back for a job well done). That will be a set up for the next phase of the decline. Watch this space.

    "There's talk of the government seizing IRAs and forcing them into government bonds"


    Here's the same information from the Carolina Journal.



    ...."There's talk of the government seizing IRAs and forcing them into government bonds"....

    I made mention of this over a month ago.

    I am completely out of the US financial system, except for about 6 months cash for expenses.

    Any paychecks/sales/fees, or income of any numerical nature,is turned into cash. ASAP. Most income is Barter/Trade.

    Anyone who wants to sit it out and ride it all the way to the bottom, better have some very deep pockets. Not me....

    For those in the UK watching the gas supply situation as London vanishes under the snow, here's an update.

    Demand for today is now estimated at 429mcm which is 64mcm above the seasonal norm. The GBA trigger levels is still set at 414 but the following message has just gone out.

    02/02/2009 13:01:49

    GBA Trigger Level Update
    Please be advised that the the GBA Trigger level is currently under review. Once the supply assumptions have been reviewed, the GBA trigger level may be amended - this would occur later this afternoon.

    Current storage figures are no longer being displayed by the National Grid website in the "report explorer" and "prevailing view". However it is still possible to view the real time flow data and to download the storage spreadsheets. This would appear to show sufficient flow into the transmission system to maintain supply but Medium Range Storage as well as LRS is being tapped. So far the critically depleted SRS hasn't been called upon.

    Presumably National Grid are considering revising the GBA trigger upwards to reflect an increase in supply from Europe.

    As of yesterday the days before breach figures at max withdrawal rate are

    SRS 1.2 days
    MRS 7.1 days
    LRS 25.6 days

    How do the current withdrawl rates compare to the MRS and LRS maximum rates?

    Can LRS be shifted to restock MRS and SRS during any warm periods to meet future coldsnaps?

    LRS is currently being tapped at maximum rate and has been consistently for the last month. MRS seems to be flowing at about 1/4 rate right now but that may increase during the day. There now does appear to be a small draw on SRS.

    LRS can refill MRS but not SRS which is LNG and can only be refilled very slowly. You can see the storage withdrawal history graphs at http://marketinformation.natgrid.co.uk/gas/ReportExplorer.aspx

    It appears that the Grain LNG import terminal is being used as a temporary substitute for SRS with flow levels varying throughout the day as demand requires.

    This from Bloomberg

    U.K. Natural Gas Falls, Curbing Gains as Supply Exceeds Demand

    Feb. 2 (Bloomberg) -- U.K. natural-gas for delivery today fell, reversing earlier gains, as shippers boosted supplies, which may exceed demand through 6 a.m. London time tomorrow. U.K. power for next month also declined.

    The within-day gas contract fell 0.55 pence, or 0.8 percent, to 65 pence a therm, according to broker ICAP Plc at 12:35 p.m. London time. That’s equal to $9.15 a million British thermal units. It earlier today rose as much as 8.3 percent. A therm is 100,000 Btus.

    London and southeastern England were hit by the heaviest snowfalls in 18 years, boosting demand for heating. The meteorological service has issued severe weather warnings for the U.K. capital. Chris Almond, a forecaster at the Met Office, said the snows were the heaviest since February 1991.

    Demand through tomorrow at 6 a.m. will be 420 million cubic meters, the highest since Jan. 10, National Grid Plc, the pipeline-network manager, said today on its Web site. Demand was about 376 million on Jan. 30. Flows into the network were at the rate of 441 million cubic meters a day. The U.K. gas market is the biggest in the European Union.

    What's curious is why the Bacton interconnector is back in import mode when prices in Europe are still higher. I know Rune was of the opinion that UK gas prices would need to go over £1/therm to attract imports via that route. Suggests something other than a pure "free-market" is working here.

    I think they know that a gas balancing alert may not reduce demand anymore, as workers at home will consume more than they do in communal workplaces.

    We don't have enough heavy industry left in the UK to regulate gas demand.

    As predicted National Grid have just upped the GBA trigger so we can probably rely on the lights not going out today anyway :-)


    02/02/2009 15:33:46
    As advised in the 13:00 communication, we have completed our supply assumption review and consequently the GBA Trigger Level is being revised from 414.1mcm to 434.1mcm.

    The GBA Trigger Level has been under regular review since the start of January in light of the recent Russian/Ukraine situation. The situation appears to have stabilised and IUK is now importing. NG believe it is appropriate given current confidence in underlying supplies that IUK import assumptions are included back into the GBA Trigger Level calculation at its base case figure of 20mcm. This is in line with expectations for this and previous winters.

    We will maintain our regular review of the GBA Trigger Level and will advise accordingly.

    So realistically speaking, what is the probability of a significant shortage in the UK? By significant I mean one that interrupts industrial users for a week or more, or that impacts residential users of gas or electricity?

    You might want to check out Update on UK Natural Gas Supplies and Storage for more informed speculation.

    In summary - the situation remains very tight for the rest of the winter. The problem this winter was made worse by the UK exporting gas from storage to Europe during the Russian supply disruption. Had the IUK pipeline not switched back to import mode yesterday then it would appear that industrial users (including gas fired power stations) would be getting cut right about now.

    Also had this winter occurred in previous years when we almost ran out of storage and didn't have as much import capacity as now then we would have been in very serious trouble. Major new pipelines have come onstream just in time for this winter.

    UK energy security appears to be based on gambling.

    Had the IUK pipeline not switched back to import mode yesterday then it would appear that industrial users (including gas fired power stations) would be getting cut right about now.

    And here was me thinking that they didn't employ people to look at these things:-)/sarcanol off/!!

    Of cousre the irony here is all the energy/power station/refinery/ strikes going on.......then all of the snow we are now getting STOPPING the srike picket action from going smoothly!

    Happy Groundhog day, everyone!

    Feb 2nd is a cross quarter day. Cross quarter days fall halfway between a solstice and an equinox.

    In ancient times, Northern Europeans counted their four seasons as starting on the cross quarter days rather than the solstices/equinoxes. This is why the summer solstice is sometimes called "midsumer day", and the winter solstice is sometimes called "midwinter day". This is also why some neo-pagan religions observer festivals on the cross quarter days.

    In the middle ages, the shift from counting seasons as starting on the cross quarter days to counting them as starting on a solstice or equinox caused a period of ambiguity. Did spring begin at the February cross-quarter day, or at the vernal equinox?

    The role of a groundhog - or maybe, in the Old World, a badger - as the arbiter determining when spring begins, is shrouded in the mists of folklore. I am guessing that in years that start warming early, animals are more active and thus more frequently seen, thus explaining the association.

    According to the supposed "official groundhog", Punxsutawney Phil, we are due for six more weeks of winter. Which means more heating degree days. Which means more demand for heating oil, natural gas, propane, and electricity. So there's your energy angle to make this post "on topic"!


    Thanks for an informative, upbeat and uplifting comment.

    We're going to need more of those in the days ahead.

    The CNBC talking heads: "Punxsutawney Phil saw his shadow. That means six more years of recession."

    I think that European climate exhibits a different timing compared with that of North America. That's because of the impact of the Atlantic, which moderates the cold blasts until the water cools down. Also, the effect of the sea-ice cycle is greater as well, as the latitudes of most European cities is higher than those in the U.S. The sea-ice cycle has a minimum extent in September and the maximum in March (usually). Perhaps that's what has given the people in Europe the idea that "Winter" actually begins on the Solstice.

    I looked as some data for the mid-continental U.S. (Kansas) 20 years ago when I first became interested in climate change. I began with data extending back to 1845, but found much of it to be useless, even that gathered after the formal start of the Weather Service about 1880. After entering 75 years of data, I played with it a bit. I found that ON AVERAGE, the coldest day of the year was in the middle of January. From this point of view, Winter starts about 1 December and ends about 1 March. That's the same time frame used today by the climate community. Of course, each year was different...

    E. Swanson

    I think that European climate exhibits a different timing compared with that of North America.

    The local forecaster was hinting that something called to North American oscillation looks like it may flip in about a week. We've been in the positive phase, meaning the jet stream is way north of usual on the west coast and dips in the center/east of the country, bringing them a good old fashioned winter. Out in Cali, this would be very good news, if it materializes, because otherwise we face severe drought. In any case, the climatologists talk abou "teleconnections", which is just a fancy term for the fact that the jet stream wiggles around the world with an approximate wavelength, so one region being warmer or colder than normal, effects the phase and amplitude of the dips in the jetstream around the world. So heres to hoping a major pattern change is on the way.

    I found that ON AVERAGE, the coldest day of the year was in the middle of January.

    When I lived in Wisconsin it was the end of January. Here in N Cali, it is around Jan 1 (I think the ground fog, which greatly lowers temps depends on the solar year, ie. is there enough sun to burn off the fog?). For climatology (time averaged over many years), it will depend upon the location. Sea surface temperatures lag quite a bit, with the minimum being near March 1st. Most states have a climatology office, with data on hundreds of stations. Google for western regions climate center. I think that only links to western states, but you can probably figure out how to find other sites.

    That's neat history. Thanks.

    Today is my birthday (76th of a hundred or more) and I saw my shadow! Six more weeks of winter ... I really think not. Sky conditions here north of Reno is CAFB. For those who know what that means, tis true, for the rest, it doesn't matter cause you wouldn't understand. Celebrating the spring crossover is a little early for today most years. We are only 62% normal precipitation so this might be a dry year unless the Hawaiian Express forms and dumps on us in the next month or so.

    It is really nice to see our new president get out and talk it up about how we are all going to be OK; though by the looks of the markets (-2.5% spot today about 10:30 PST)) the term SNAFU and FUBAR come to mind more than the old song "Pennies From Heaven".

    Hang in there Airdale.

    Happy 76th!!


    The juxtaposition of the two climate change stories at the bottom is interesting. In the one, the developed world residents accept that change is coming and start talking about things like sea walls and extra-reinforced shingles for roofs. Perhaps it is there being residents of a city that results in their perception. Perhaps it is that they still think of their food as coming from the grocery store.

    But the narrowness of their vision is made clear by the story of Kolkata where the issue is not protecting some buildings, but the loss of agricultural land to salinization. How do you adapt to the loss of agricultural land? Move away or starve? And that's a city of 12 million, many times more residents than the first story's Boston.

    Though it isn't mentioned, I assume the water volume flowing down the Ganges is less as well, due to upstream use. If so, less freshwater to flush the estuary will also increase in the infiltration of sea water. 12M motivated people could do a lot -- could they turn the delta into world's largest dam and lake, holding back the sea while sequestering more of the fresh water?

    While I suppose you could build a (reverse?) dam that would prevent sea water from flowing back up the river, would it prevent the sea water from infiltrating the ground water?

    And from a practical perspective, dams require some sort of choke point. I don't know that much about the topography of the Kolkata region, but I believe we are talking about a delta / flood plain where no such choke point exists. So I believe we're talking sea wall not dam - and just how long would that sea wall need to be? That's one big river! Anyone with any dam /sea wall engineering background want to take a stab at this one?

    The problem for the residents of Kolkata might not be one of motivation, but of practicality, especially when you start to include cost into the equation. That "motivation" might wind up being the motivation to move elsewhere. But where?

    I have no expertise in hydrology, but I've heard that in Gaza the seawater is infiltrating due to the draw-down of aquifers. If that is universally the case, then really we need aquifers to be filling, not draining, yet the reverse is of course the current state of affairs.

    Yet another resource crush getting ready to pile up on the coastal poor?

    Maybe it is fitting. Tragic, but fitting. Civilization was built upon exploitation of the fertility of alluvial flood plains (except in Peru, always an exception isn't there). So, could it be that the destruction through salinization of some of our more important flood plains could be the end of civilization?

    I would suppose that any delta region could be at similar risk.

    Peru an exception? How so? The motor of central Andean civilization has been the floodplain agriculture of the northern Peruvian valleys, alternating over the cultural evolutionary sequence with state formations predicated on control of exchange between altitudinal zones up, down, over and across the Andes, but always pivoting in some way on coastal agricultural polities.

    Dear Paleocon,
    that is quite possibly a reason, but it is also possible that the slight increase in MSL is consistent with crustal warping at the Delta. A large amount of mass has been transferred from the Himalayan Mountain chain due to high energy river system to a low energy depositional environment. This accumulation of mass is compensated by crustal warping over time, and the result is a very slightly higher percieved increase in MSL (about 1mm above normal in this case. This phenomena is observed in most major delta systems. And, if the delta-front is subsiding, you should anticipate a return to a brackish environment.

    Also look at the regional tectonic setting: India is driving under Asia and therefore buckling, hence the creation of the Himalayan Chain. Within the regional tectonic setting, buckling and warping of the crust should be expected, even at some distance from the obvious manifestation of the creation of the Himalayan Chain. But of course it could be due to global warming even though Sea Level Rises are consistent with our climb out of the last Glacial Phase. But if people can pin it on Carbon, they will do.

    I suspect that dredging and canalising would be a more effective way of helping these people avoid salinisation than spending cash on carbon credits. But that would involve real work, real money and not benefit the carbon - traders at all.

    Well, golly! I bet the climatologists have never considered plate tectonics or rebound from ice melt before!!



    Now, since rebound *is* considered, for example in the area of the British Isles, yet areas of soutehrn England are being inundated, I think we can surmise SLR is overwhelming and crustal mechanics. The rate of change should not be greatly different for the Indian sub-continent.


    Dear CCPO,
    Southern England and Holland are sinking - the Southern North Sea Basin is a depositional Centre from the Rhine, Maas, Ijsel and Thames. North Western Scotland is rising due to Isostatic readjustment from the loss of Ice Mass after the last Ice Age.

    Why should the rate of change not be greatly different for the Indian Sub-continent?

    Dear Dropstoneonmehead,

    I see you neatly ignore the fact that SLR is already being measured with isastatic influences included. You tried to imply SLR needs to consider rebound. That was a lie. It already is figured in.

    Quit lying.

    As for Southern England, you are correct. I wasn't reading carefully enough. But since IR is fully considered and is not some secret source of data that would, if considered, destroy the science being done wrt ACC, I really don't think it worth my time to find a perfect example to refute your pretense at ignorance. (Yes, I am saying you are not honest.)

    Here's another of many papers on SLR and IR.

    http://www.atmosp.physics.utoronto.ca/~peltier/pubs_books/W.R.%20Peltier... - http://www.atmosp.physics.utoronto.ca/~peltier/pubs_books/W.R.%20Peltier...


    Can we knock it off with the name-calling, please?


    Check out the Cape Hatteras photo in the slide show...

    The photos of the glaciers are truly stunning.

    I was less impressed by the Hatteras photos. I've lived near the ocean for much of my life and know first hand just how much a beach area can change shape. A storm, different currents resulting from time of year or normal ocean "weather," development further down the coast can all have impacts on beach sand deposits. Perhaps if I knew the specific area where the photo was taken I would be less sanguine about it.

    That part of the island is eroding, but the other parts to the island aren't. Hatteras is an overgrown sandpile that's constantly trying to move

    Dear Urban Gardener,
    Yes, that is exactly what I would expect to see due to longshore drift coastal erosion. There are many examples of such coastal erosion from North Yorkshire all the way down to Norfolk (where coastal deposition has closed off several medieval harbour towns from the sea). Whitby Abeey was about a mile away from the cliff edge when the Vikings Sacked it, it is now less than a quarter of a mile from the cliff edge. The eroded mass has been transported to Norfolk and has closed of ports and inlets that thrived in the middle ages. Such processes are merely geomorphological and quite normal.

    Glacial retreat is of course to be expected as we arrive at peak interglacial - and who knows? perhaps this new cooling trend and consequent glacial mass increase is now suggestive of moving into a post thermal optimum? - It is of course too early to tell, but it does shoot the C02-Global-Warming fox.

    What is wrong with your gray matter? Glaciers are retreating = no ACC?

    Water changes land forms = no ACC?

    And you've got proof the material now at Norfolk used to be at Whitbey (not that it matters in any way shape or form wrt ACC)?

    Cooling phase? We already kicked you in the teeth on that. The ninth or tenth warmest year on record (only because of the Pacific was cooler else it would have ranked much higher) pulls the trend UP, not down.

    Are you deranged?


    Dear CCPO,
    No I am not deranged. BTW what is ACC? I assume it is your new shorthand for Anthropogenic Climate Change, Since Anthropogenic Global Warming no longer gets more than a cynical laugh out of people and an increasing number of scientists.

    Hear my cynical laugh at the denial.

    People will believe anything if they perceive the alternative to be unpleasant for them.

    Dear Droppedonmehead,

    What I note, as always, are your lies and the complete and utter lack of any links to any legitimate scientific work. Look at the newest lie: People only laugh at the concept of climate change.

    You are a liar. I said it when you first started posting. I called you on your facade.

    Why you are allowed to post here is beyond me. There is zero doubt in my mind that you are paid to be here spewing this crap, or, at the very least, are part of a concerted effort to mislead the general public.

    May your crimes catch up to you.


    As recession ravages their assets, the rich retrench

    The rich may not be quite so different than you and me these days: They, too, have less money.

    Their fortunes have fallen along with the prices of stocks, oil and real estate.

    Luxury condos on Florida beaches languish; champagne sales are down; private jets sit idle.

    As economic fears rise, families on verge of unraveling

    Signs abound that the battered economy is causing serious damage to the mental health and family lives of a growing number of Americans.

    Requests for therapists have soared, Americans say they're stressed out, and domestic-violence and suicide hotlines are reporting increased calls.

    "I've never seen this level of anxiety and depression in 22 years of practice," says Nancy Molitor, a psychologist in Wilmette, Ill. "The mental health fallout has been far worse than after 9/11."

    2008 Consumer spending: 47-year low

    A Commerce Department report showed spending by individuals fell 1% last month, after dropping a revised 0.8% in November. Economists surveyed by Briefing.com had forecast a 0.9% drop.

    Interesting that personal income held up better than anticipated, but spending dropped more than expected anyway. People really are "building financial bomb shelters."

    One of the CNBC talking heads suggested that the money Americans are saving is coming from lower gas prices.

    Denninger has a post today about the hazards of buying used cars.

    It reminded me of the Friedman column someone posted yesterday. We're losing all trust. For good reason, but you have no economy without trust.

    Isn't it more the hazard of trading in cars that still have loans on them?

    In my state the title is encumbered with the lien, so I don't think anybody could re-title the vehicle in their name without a lien release. Probably you'd have a heck of a time getting your car back, but I think it would not really be "theirs" until the lien was satisfied.

    There is a lot to be said for buying cars with cash and then driving them until the wheels fall off.

    Denninger is more concerned with the overall tolerance for fraud exhibited by the USA government. Re Freidman, he writes as if himself, as a prominent cheerleader for global fraud and malfeasance and the NY Times are innocent bystanders in the whole mess.

    The reason the fraud continues is that there is little or no punishment. Madoff continues to live mostly as before in his Manhattan home. George Bush retires from the Presidency after taking "responsibility" for the mess he made but in reality there is no real loss for him. He still receives his pension and will live happily ever after.

    Alan Greenspan who ignored/created the dot com and housing bubbles along with the derivate debacle is still seen as a maestro of finance in some quarters. And the paper shufflers who securitized mortgages made off with multi million dollar bonuses. No one is in jail that I know of.

    And those who call bullshit on fraud are either held in contempt or ignored. It then should be no surprise that when fraud is rewarded rather than punished it continues unabated.

    Re held in contempt, there might be a cultural value working here-as an example, Jose Canseco is the most widely reviled modern baseball player, almost entirely because of his exposing of roid and GH use in baseball.


    Hey X,

    Normally I disagree with your posts, but this time I agree. What a pleasant surprise. Since I'm an equal opportunity rater/commenter, I'll give you a big +1 on your post.


    The NY Times had a letter-to-the-editor this morning that states in few words how we wound up with what Denninger calls "The Bezzle":

    High compensation doesn’t attract the very best. It attracts the greediest.

    To suggest that money is the most basic instrument of human value is more descriptive of the system that provides advantages and shortcuts than it is of the manner in which we measure the finest examples of human achievement.


    What outcome could we have expected when, for the past 30 years, we have based our entire economy on a paradigm that is built on the motto "greed is good"?

    Maybe its not "financial bomb shelters," but the servicing and paying down of debt?

    Most home owners have lost value in their home and may have no more equity to borrow against. I have been hearing from more and more people that their home equity LOCs have been frozen.

    And Credit Cards aren't any better. Most of the large banks have raised their rates and are being much more restrictive in handing out new cards.

    Could be that the losses (both housing and equities) have brought an end to consumer credit expansion. We've been spending more than we earned for a number of years now, and without the growth in assets, new debt is simply not possible.

    And Credit Cards aren't any better. Most of the large banks have raised their rates and are being much more restrictive in handing out new cards.

    It seems that the CC companies are cutting off credit lines (one card of mine pulled) and are lowing the maxes.

    The slashing of credit to consumers is now a topic in Congress as 'credit scores' are computed by the amount of credit others have extended to you and
    how much of that extended credit you are using. Slash the credit, lower the score - and some people are whining as the people who pimp the scores make a high score sound important.

    I have a client (I'm a Life Coach) who, until she inquired about her summer teaching schedule, had not a clue as to what has been coming. She's an adjunct professor at a private university and a community college.

    I am amazed at how many still don't see it coming/happening. One of my sisters teaches a financial course (Dave somebody?) and the stories she tells are frightening. So many households that have no net cash... only credit cards.

    The mess making continues with not a thought as to how we can a)stop the mess making and b)clean up what exist.

    Dave Ramsey -- his thing is paying off all debt ass quickly as possible. He has a show on the Fox business channel.

    I think 7 people watch that channel now.

    MC Hammer's pain scores in Super Bowl ad

    NEW YORK (CNNMoney.com) -- It's a telling sign of the times that one of the most popular commercials in last Sunday's Super Bowl was from an online pawn shop.

    The ad for Cash4Gold, where rapper MC Hammer is reduced to selling his bling as pitchman Ed McMahon cashes in his gold toilet, won the top spot in the Kellogg Super Bowl Advertising Review.

    Tim Calkins, a marketing professor for the review, which is run by Northwestern University's Kellogg School of Management, said this was "almost the most astonishing development on Super Bowl."

    (The ad can be viewed here.)

    ALERT: There is a co-ordinated effort to find reasons to declare all customers sub prime as quickly as possible. American Express is even using what stores you shop at as a means of raising your interest rate. If other customers who shop at the same store are having problems, you are declared higher risk. Astounding treatment of customers documented here, and this is just the tip of the iceberg:


    Make no mistake, this credit crisis is a created crisis using very sophisticated means and methods to loot the biggest investing/owning class in world history, the baby boom generation. The current crisis is a turning point in American capitalism, and basically ends it in the sense that our generation was raised to understand it.


    That's been posted before. Amex says they aren't doing it any more.

    Credit cards are tightening their restrictions, because the economy means more people are defaulting, and because the Democratic takeover of Washington means more regulation coming. The new rules are expected to ban raising interest rates after the debt is incurred, so of course they're all rushing to raise them now, while they can. Or cut customers loose, if the risk outweighs the interest they are allowed to charge.


    Your correct, but allow me to differ with one point you make if I may because it is a BIG one: "Credit cards are tightening their restrictions, because the economy means more people are defaulting"

    That is true at the margins, but what is happening is much, much bigger. The financial companies are now driving the default rate, and pushing people into default through fraud and corrupt lending practices. The economy per se is simply not that bad, but the financial houses are driving the crisis. It began in the auto sector, where the sellers can make more money selling the same car over and over again than they can in finding solid customers to buy it once. The housing sector followed, with terms set so outrageously that the customer was sure to fail, and the house could be sold again and again. Now we are seeing the same thing occur in consumer credit, where a household essentially bleeds to death trying to protect the fiction of a good credit rating, and finally bankrupts after paying off the principle at least 4 or 5 times and then still falling short because the goal is moved forward each time the debtor gets close.

    It is imperative now to STOP all use of credit cards and consumer credit if the individual or family hopes to survive financial. Go to debit cards and credit unions as quickly as possible, this is a real emergency situation. We must try to hang on to what wealth we have left and dealing with the banks absolutely assures that this will not be possible. To repeat, this is an emergency, a crisis that is unfolding NOW.
    Worry about peak oil tomorrow, FIRST you must deal with this crisis, or you will not have enough money to buy oil at a dime a gallon.


    It is imperative now to STOP all use of credit cards and consumer credit if the individual or family hopes to survive financial. Go to debit cards and credit unions as quickly as possible, this is a real emergency situation.

    Strongly disagree. Staying out of debt is probably a good idea, and I'm all for banking with credit unions instead of banks.

    But no way am I using a debit card. Those things put money into banks' pockets just like credit cards, but are far less secure. By US law, you get far more protection on credit card purchases than debit cards.

    Criminals are getting more desperate with the bad economy, too, and in some areas, the police are warning people to never use debit cards in places like gas stations, which are hard to secure. If your credit card is ripped off, it's the bank's money that's gone. If your debit card is ripped off, it's your money. Your checking account could be locked for months while they sort it out. With a credit card, you get a new card in three days.

    I am increasingly fond of cash. It seems to work well, except for pay-at-the-pump gas stations and on-line, and business travel. I use Amex for those, as at least I am forced to pay it off every month so nasty habits are less likely. Even with that I'm down 50% year over year, as I begrudge giving them a few percent.

    The other point is to be sure you never incur late fees for mortgages, banks, or credit cards. That's just free money for the blood-suckers.

    That's true, but IMO, Roger's warning is years too late for that. Credit card companies have been living off penalty fees and such for years. Their favorite customer was the one who was on the brink. They carefully milked such customers for all they were worth, charging as much in interest and fees as they could without pushing them over the edge into bankruptcy. And yes, such customers would end up paying four times their original charges, and still not make a dent in the debt.

    But those days are gone. Credit card companies are now avoiding such customers, because they won't be allowed to abuse them as they could in the past, and because it's simply become too risky: there's a much higher risk of default now.

    People who can pay down their debt/stay out of debt are doing it. The ones who are now piling up credit card debt are the ones who have no choice.

    To avoid some of the more frightening debit card scenarios, I've gotten just ONE credit card. I only use it for online purchases or other things where I am not swiping the card and entering the PIN myself. It has a mere $500 limit (I don't travel much at all), and I always make sure that I pay it off in full each month. In fact, I won't even wait to receive the bill, I'll go ahead and make an online payment almost immediately after I've made a credit card purchase, just to make sure that there is no possible way they can claim that my payment was late. That is an extreme measure, but I just don't trust the *%* *&*% ba$tard$.

    As for my debit card, I limit the amount of money in my checking account that theives could clean out, and leave the bulk of my money in a savings account. I check my balances often, and can transfer money into my checking account if it looks like I'm getting low. These are all with a credit union, I don't trust the banksters and have no intention of letting them get hold of my money again.

    I'm lazy. I pay my bills automatically online, including my credit card bills. (In fact, most of my other bills are paid via credit card.) That means no late fees, ever.


    BTW, swiping the card and entering the PIN is no protection. It's the swipes and PINs that are being stolen, often with fake card readers and hidden cameras. They use the info to create their own cards and empty your account.

    Often they use hotel room keycards reprogrammed as credit cards. They are innocuous if they're in your pocket or purse and you get searched, and they all work the same.

    I'm lazy. I pay my bills automatically online, including my credit card bills. (In fact, most of my other bills are paid via credit card.) That means no late fees, ever.

    actually, there are still a lot of ways to make money using a CC. Our usual card pays 1% back on everything in cash, and paid 5% for the first 90 days. My wife got an extra card that offered 5% back in the first 90 days and actually paid our taxes with it this year, which I wouldn't have thought would be possible. And yes, we got the money for doing it. There are also airline deals which will give you a RT ticket's worth of FF miles for signing up and charging several hundred dollars in the first couple months. After we hit that mark, we just throw 'em in the drawer and cancel right before the annual fee is scheduled to kick in the next year (first year is free, natch). And say, I loved it when you could buy I bonds with bonus cards online; a free RT ticket from Hawaii to the mainland with every year's 30k purchase. (now the gov won't even sell you that many).

    So are we taking advantage of them? Absolutely. They can access our credit history and see what we're doing, so in effect they're betting that we will be holding their cards when we finally lose our inhibitions and start spending madly. Hard to be sympathetic for an industry which makes its money by exploiting human weakness, so we'll probably keep doing it.

    No down side really except making sure to keep good records and cancelling on time. And on the off-chance we ever need to flee the country in a hurry, we've got a lot of good credit cards with preposterous credit limits.

    Yeah, there's that, too. I use two cards: a Discover that gives me 1-5% cash back, and an Amazon Visa that gives me 1-3%. It really does add up. I charge everything: gas, groceries, utilities, etc. I get hundreds back each year.

    I doubt they're losing money on me, even though I never pay interest or fees. They're getting money from the merchants for each transaction. Yes, it's added to the cost of the merchandise...but you're paying for it anyway, even if you don't use credit cards.

    I know that's all true, but I'd rather give a local merchant 3% than Visa, especially since they strong-arm merchants into not giving discounts for cash.

    I would like to be principled and pay only cash, but I succumb to the convenience aspect of cards all too often. My disgust at the credit card customers is getting me to the point that it's worth the walk inside to pay for gas and to pick up an extra few hundred in cash at the credit union.

    I just don't like carrying a lot of cash. I'm afraid I'll lose it, or get mugged. Credit cards are just a lot easier.

    That's reasonable, but really have you ever gotten mugged?

    I'm pretty comfortable carrying $300 or so in cash, and that will usually last me a good number of days. I figure the hassles of canceling my credit cards and bank accounts are worth more than that if my wallet gets stolen, so it seems like "diversified risk" to me.

    Yes. I grew up in a rough neighborhood.

    Sorry to hear that. I guess you wouldn't want to be a repeat target, for sure, but whether you carry $20 or $200 wouldn't much change your probability or impact of being mugged. The money is small compared to the stress of the mugging, seems to me.

    I hear that statistically speaking guys get mugged more often than women, but I still don't feel worried. Maybe that's an irrational view from an XXL guy who has never really faced any physical threat?

    Could be. I don't think men realize how much women think about security. The average American woman thinks about her physical security every time she leaves the house, and sometimes even at home. It's just part of life. IME, men just don't get it.

    My former boss is a really nice guy. He always stops to help out if he sees a car at the side of the road. Even if it's 3am in a bad neighborhood. I would never do that; he thought I was crazy because of it. But every woman in the office agreed with me.

    Another example: a friend of mine stayed over the summer at Texas A&M, sharing a ground-floor apartment with a male friend. They fought constantly over whether the windows should be open or closed. It was hot, he wanted them open. She was worried about intruders, and wanted them closed and locked. One night, he left his bedroom window open when he wasn't home. Someone crawled in and tried to rape my friend. She was a skinny little thing, only 110 pounds, but very athletic. They fought for a good 20 minutes before he ran away. She ended up in the hospital, but it could have been a lot worse.

    I think you're right. Have had these kinds of fights with girlfriends often. I want to go eat in a bad neighborhood, they won't go. I'm fine with walking 10 blocks home from the bar late, they want to take a cab. Unless you can see the drug deals happening, I think the neighborhood is fine, etc...

    I probably should worry more about it, but I just don't.

    Perhaps hypocritically, I always counsel my girls to not have first-floor rooms (they tease me, "Rapists don't know about ladders?"), to always lock their car doors, always check the back seat, don't park far out, call for escorts on campus, always look around, etc.

    I mostly avoid bad areas and projects just like I always wear my seatbelt, but not from any abject fear. I feel comfortable with open windows (I'm the only one in the house who feels that way), yet I always close them and lock my door when I leave. I have a healthy distrust of criminals, including home invasions, but not so much about a physical assault on me.

    Still, I have "concealed carry class" on my 2009 to-do list. I figure things will get worse.........

    Maybe that's an irrational view from an XXL guy who has never really faced any physical threat?

    No. Large people are targetted less often for violent crimes of opportunity. The reason women worry about security more is significantly tied to proportional power.

    It is irrational to not allways be alert in unfamiliar territory however. When someone starts asking you for directions, make sure his buddies aren't behind you.

    A very dark thought:

    I know about the problems with ID theft, etc. with debit cards. Thus the claim that one is better off not using debit cards, and using credit cards instead.

    So is it REALLY just common criminals behind all of the debit card problems? Or is there something much more sinister at work?

    Cui bono?

    I don't think they are common criminals. Some are, but the real money is with organized crime in Eastern Europe. The money ends up funneled to the Ukraine or some such.

    It seems to be getting worse, not least because a lot of techies have lost their regular jobs and are looking to earn money in other ways.

    They have their fingers in a few pies http://www.deepcapture.com/

    Holy cow. It's been a long time since I heard the names Milken and Boesky.

    It's been a long time since I heard the names Milken and Boesky.

    Look at them as "training wheels" for the big time (Reagan had just opened the casino doors full time, and discovery of what could be stolen and looted was in it's infancy) greed heads that finally were able to ride full time when Bush came to power.

    According to that article, they're behind the current crisis, too.

    That deepcapture site has some spookie stuff on it.

    This past month, NY Becomes 8th State to Join 1 GW Wind Power Club

    See details at:


    It isn't just wind turbines and oil/gas rigs that aren't getting funded because of the credit freeze:

    OpenTable and Medidata Hope to End I.P.O. Drought

    Initial public offerings are a rare breed these days, but two venture-backed technology companies are set to brave the public markets.

    If either succeed, it would be the first I.P.O. of a venture-backed technology company since August, when Rackspace Hosting, a Web hosting provider, went public. That is a startlingly long drought. All told, only six venture-backed companies went public last year, the fewest since 1977 and down from 86 in 2007, according to the National Venture Capital Association.


    BTW, Rackspace (RAX) was 10.7 at its opening in 8/08, and now it's below 5.

    For all you "population is the problem" fans out there, here is a juicy nugget from Ruben Navarrette to get hackles up:



    "The family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now, and part of what we do for children's health, education and some of those elements are to help the states meet their financial needs. One of those -- one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government."

    Ruben Navarrette's comment on Pelosi's statement:

    There is nothing more private -- that is, none of the government's business -- than the personal decision that a family makes about how many children to have. Besides, Pelosi's comments had an ugly ring to them.

    Mr. Navarrette is full of it. First, Pelose is not trying to tell families how many children they can have. Navarrette has it backwards, it is the government that is trying influence childbirth by denying poor people information about birth control and contraception. Pelosi just wants to make the information, and contraception, available to those who want it.

    And Consumer, this has nothing to do with population being good or bad, it is only about giving poor families the freedom to access information and contraceptives they need to voluntarily limit their family size.

    But back to Nacvarrette, I get so damn tired of these right wing idiots trying to make birth control the work of the Devil. He even attacks Margaret Sanger and accuses her of being a racist and an anti-Semite. That is a lie:

    The Truth about Margaret Sanger

    Unable to foment popular opposition to Margaret Sanger's accomplishments and the organization she founded, Sanger's critics attempt to discredit them by intentionally confusing her views on "fitness" with eugenics, racism, and anti-Semitism. Margaret Sanger was not a racist, an anti-Semite, or a eugenicist. Eugenicists, like the Nazis, were opposed to the use of abortion and contraception by healthy and “fit” women (Grossmann, 1995). In fact, Sanger’s books were among the very first burned by the Nazis in their campaign against family planning (“Sanger on Exhibit,” 1999/2000). Sanger actually helped several Jewish women and men and others escape the Nazi regime in Germany.

    Ron Patterson

    "by denying poor people information about birth control and contraception."

    I grew up poor in the 30's and 40's and I knew damn well what caused babies and how not to have them. I rather doubt that young adults today don't know about contraception and birth control pills, vasectomies, etc. The idea of denying people information about birth control is some stupid talking point on a political briefing.

    Come on be real!

    How much of the money for birth control actually goes for condoms and pills, versus how much goes to politically-connected service organizations? What teen doesn't know how to Google for information? Seems like pork for staunch supporters to me.

    To be equal opportunity, we should point out that conservatives sent money to Derek the Abstinence Clown. Just what Johnny needs: a clown telling him to punch the clown.

    The common difference is that conservatives give their own money and liberals give other people's.

    Of course Republicans are liberal spenders too, so I agree 100% with your 'equal opportunity' point for them.

    The common difference is that conservatives give their own money and liberals give other people's.

    Then there are no conservatives in American politics.

    That's a real shame.

    Um, the abstinence clown was funded as part of an $800,000 federal grant for abstinence-only sex ed. So, please spare me the lines about liberals spending other people's money.

    That's $800K of somebody's money, and unless the good Senators ponied up the dough it's not "theirs". If Ron Paul voted for it then I'll retract the "liberal" comment.

    I handle sex-ed for my kids. I suggest other people do the same and let's just not spend our money.

    No, you get real Lynford. How many women poor women have information about IUDs or how to get one? Or how about sterilization? Is information on costs and availability of that readily available to poor families?

    You would be shocked at the naiveté of some people, especially those raised in households where such subjects were never discussed. Your experience Lynford, is purely anecdotal and does not represent the experience of the vast majority of poor, and in many cases, very uneducated people.

    And family planning clinics must be financed. They provide free condoms as well as free counseling. The services of these clinics are available and used primarily by the very poor.


    It's not just knowing 'what makes babies'.. Kids are routinely underinformed about STD's, about Pregnancy prevention, and most importantly are allowed to learn simply their peers' and TV's prevailing views on 'Gettin Some' without a regular set of wakeup calls about being a Teen with Aids, a teen with a Baby, a teen with an ex-boyfriend, and a baby.

    Sex-Ed raises hackles, and understandably so.. but convince me that these kids are picking up what they need from a couple Public Service Announcements during the Grammies.


    I rather doubt that young adults today don't know about contraception and birth control pills, vasectomies, etc.

    But can they get access to them??? After years of battles to limit access waged by rightwingers? Even college girls can no longer get birth control from the student health clinic on campus at our state University. Many health insurance plans do not cover it. Not to mention the conscience laws some states are being pressed to enact. I forget the exact name, but it allows pharmacists who disapprove for the morning after pill, for example, to refuse to fill the prescription.

    And believe me, it's hard to get a tubal ligation or vasectomy when you're young. Doctors don't want to do it. I tried when I was 21. I had one child, when I was 19 and the pregnancy involved serious complications. So I asked for a tubal ligation when I was 21 - and was refused outright.


    You clearly were not forced to go to Catholic schools....


    I’m getting mixed signals about what your position on the government’s involvement in population control should be. Yesterday I got the impression you were arguing for a hands-off approach, that it was too late to do anything about population overshoot, so why try.

    Your last response reminded me of an article I read a year or two back. Some scientist, a highly renowned climate scientist who had a track record of being right about these things, predicted that in the not-too-distant future the majority of the Earth’s surface would be too hot and arrid for humans to live on. The only part of the Earth that would be habitable for humankind would be small areas around the North and South Poles, and these would only support a population of a few hundred thousand people. The physical and chemical processes that would bring about this dreary outcome were irreversible and had already been set in motion.

    I was raised a southern Baptist, and I remember well the ritual that was repeated every Sunday morning. The first volley was a hell, fire and damnation sermon in which the pastor assured us eternal suffering, except for the grace of God. There was absolutely nothing we ourselves could possibly do to avoid this painful and ignominious outcome except to accept God’s salvation and become a member of the congregation. The invitation was always accompanied by the same song and I remember the refrain well: Only trust Him, only trust Him, Only trust Him now; He will save you, He will save you, He will save you now.

    One of the things that has made science so appealing was that, historically speaking at least, it made the same bargain that the Baptist preacher did. It identified a problem, but then it offered a solution, or at least the hope of a solution. As Jacques Barzun pointed out, “public opinion took a good while to connect science with practical benefits such as bridges and machines,” but the pattern was eventually set. Yankelovich expands on the theme:

    The quest for knowledge enjoys enormous prestige in our society and scientific-technical-factual information has hegemony over other modes of seeking knowledge. Those who possess it—the experts—lord it over those who do not. Experts play a dominant role in public life because they are presumed to have the knowledge that ordinary folk lack. Nor is our culture likely to diminish its high regard for experts in the future because their type of knowledge has contributed so much to our national successes in extending longevity, creating affluence, and using technology to make life more comfortable, convenient and stimulating.

    --Daniel Yankelovich, Coming to Public Judgment: Making Democracy Work in a Complex World

    The other great advantage for science, as Barzun goes on to add, is that “it frees the imagination. Since there are no preconceived ‘ends’ that things must ‘reach,’ anything is possible.”

    But now comes forth Darwinian, together with a handful of scientists, who want to change that deal. They tell us that science not only offers no salvation from their doomsday scenario, but no hope of any salvation. Is it any wonder that science now finds itself in a crisis with the “ordinary folk?”

    This problem is exacerbated by practioners of social disciplines, like economists, who have also held themselves out as “scientists” and “experts.” A whole lot of people are now beginning to ask: “What has their ‘science’ and ‘expert knowledge’ wrought?”

    So, can you see the internal inconsitency in your argument when you claim your doomsday scenario is a “pure scientific position,” and then further compound your credibility gap by expressing shock and indignation when people don’t immediately fall in lockstep?

    I feel much of the resistance to your argument has little to do with whether you are “right” or “wrong” in your doomsday prognostication. What it has to do with is that you are asking people to take a paradigm in which they have been steeped since childhood, and to turn it on its head. That’s not something that is easily accomplished.

    And I’m not sure it’s productive either. For what if you are wrong? What if we can modify our behavior, can change our carbon footprint, can rein in the population and save the planet from a dreadful doomsday scenario? Sure, I understand this is a Pascal’s Wager. But, unlike Pascal, I’m not talking about salvation in the hereafter. I’m talking about salvation in the here and now.

    Well, anyway, today you seem to be arguing a lot more interventionist position on the part of the government (Which I, by the way, am fully in agreement with). So I'm a little confused about where you propose to take us.


    I really enjoy your intellectual posts. More than just a bit of class. Thanks.

    I was Southern Baptist for a number of years when growing up and they thought dancing was bad. Outside of church, on Post Office Street in Galveston, I learned "dancing is not bad." In Vietnam I found Galveston was not so bad.

    I thought Al Capone was bad, but after seeing what has happened in the last few months in the financial business, I find "He wasn't so bad" in fact, he was a piker. At least I don't believe anyone ever got blindsided by Al but congress does it all the time for a heck-of-a lot more than he ever stole.

    It seems the older I get the more I find there is always yet another level of badness.

    Beyond that ... "Goodness Happens Too"

    I’m getting mixed signals about what your position on the government’s involvement in population control should be. Yesterday I got the impression you were arguing for a hands-off approach, that it was too late to do anything about population overshoot, so why try.

    You are mixing apples and oranges DW, family planning clinics have absolutely nothing to do with population control. Family planning clinics are all about providing services, contraceptives and information to poor families that they may make their own reproductive choice, and the government should keep their noses out of it, except of course to provide these, and other medical services to the poor.

    I was also raised a Baptist, Primitive Baptist was the schism my folks belonged to. Almost all my extended family are still fundamentalists of one sect or another. I am the very only black sheep in my extended family. My wife and children however have opinions on religion very similar to mine.

    But concerning science, you overlook a very important point. There are some problems that science cannot solve, and will readily admit that they cannot solve. Just like medicine, some diseases can be healed but others are fatal and there is nothing doctors can do to hold fix the situation. I lost a niece, age 52, to breast cancer and a sister, age 59 to lung cancer. (Neither she, nor anyone in her immediate family ever smoked.) My point DS, is there are some cases where the cancer has progressed too far to be cured.

    But now comes forth Darwinian, together with a handful of scientists, who want to change that deal. They tell us that science not only offers no salvation from their doomsday scenario, but no hope of any salvation. Is it any wonder that science now finds itself in a crisis with the “ordinary folk?”

    We are not changing anything. There are many people who are in the final stages of a fatal disease, still believe that they can be saved and some who have no idea that they are even sick. There are many scientists who believe that the earth can be saved by technology, and many others who even deny that a problem exist. Our position, (we doomers), simply maintain that the cancer has progressed way too far for a cure. (I still do not like that analogy but I cannot think of a better one.)

    So, can you see the internal inconsitency in your argument when you claim your doomsday scenario is a “pure scientific position,” and then further compound your credibility gap by expressing shock and indignation when people don’t immediately fall in lockstep?

    Now you are just making up crap DS, and that pisses me off. I have never expressed shock and indignation because people don't fall into lockstep with me. I fully expect that. I do get frustrated sometimes by many people's really dumb arguments. But a good logical argument is always appreciated. None of my family believes as I do about the future of humankind. I understand them and love them dearly. But they do not make very stupid arguments as some folks do.

    I feel much of the resistance to your argument has little to do with whether you are “right” or “wrong” in your doomsday prognostication. What it has to do with is that you are asking people to take a paradigm in which they have been steeped since childhood, and to turn it on its head. That’s not something that is easily accomplished.

    I happen to know that many people on this list have doomer opinions very similar to mine. In fact that is likely the majority opinion here or at least close to half. The very same opinion is held by many of the authors recommended by many on this list, like Richard Heinberg, James Kunstler, William Catton, Reg Morrison and I could go on and on. On this list DW, my opinions are not all that strange. You should have figured that out by now. And many steeped since childhood in another paradigm, have already switched paradigms.

    And I’m not sure it’s productive either. For what if you are wrong? What if we can modify our behavior, can change our carbon footprint, can rein in the population and save the planet from a dreadful doomsday scenario?

    I will let Montaigne give you my answer.

    I should not speak so boldly, if it were my due to be believed; and so I told a great man, who complained of the tartness and contentiousness of my exhortations.

    In other words there is not a chance in hell that anything I say or do will make any difference whatsoever. After all, how could I possibly claim that I make any difference while saying that anything you do will not make any difference.

    One more very important point. Just because I believe there is nothing we can do to save the world, does not mean I think there is nothing you can do to save yourself. In fact that is my main argument: One should spend their time, energy and resources trying to increase their own chances of survival instead of wasting them trying to save the whole damn world! I believe there will be survivors. And if I were much younger, (I'm 70), I would try to form a community of those who hope to survive. And if we were lucky enough to survive, then I would have an entirely different attitude as to reproduction and population. I would be more like Garrett Hardin who wrote:

    In the arrangements of nature, freedom is relegated to an operational position that is secondary in importance to survival…..In a competitive world of limited resources, total freedom of
    individual action is intolerable.
    - Garrett Hardin, The Ostrich Factor, page 140

    But it is way too late for that to do any good now. So I just sit back and observe.

    Ron Patterson

    How about (for an disease analogy for the situation the world finds itself in now) the fittingly named "consumption"?

    Tuberculosis weakens the patient. And our industrial economies are weak. (The roads are scarily empty except at rush hour around here.) The tuberculosis patient often coughs up blood--these are the financial crises that hit (Lehman, bailouts, markets tanking) but then the patient seems to "recover", gets up and walks around. Tuberculosis has historically been associated with a lot of denial too ("Oh it's just a cold!--nothing seriously wrong here! He certainly isn't DYING or anything!" (nervous laughter). It's hard to cure and was incurable before. It can be fatal. The point is that the patient seems borderline OK for a while but is really seriously, possibly fatally ill. The disease progresses and the patient can't breathe, can't do anything, then expires dramatically (if it's Wuthering Heights or La Boheme) while the other characters in the opera stand around and gasp wondering if they've caught it too.

    distemper: a deranged condition of mind or body.

    The problem is that most of the people have "fundie" disease.

    Fundie distemperment is being pro-end-times and anti-choice.

    the undistempered people are pro-choice and anti-end-times.

    Most of us here are splitting hairs in comparison to a huge chunk of people that have an unchangeable belief system.

    Well we all knew this was coming...It's unnerving to see that it has finally arrived.

    California officially out of money

    SACRAMENTO, CA (KGO) -- This is the day the State of California may start issuing IOUs rather than writing checks that are almost guaranteed to bounce.

    The controller predicted the state would run out of money by the first of February if no budget deal was in place.

    All eyes are on Sacramento Monday, watching to see what the state will do. It is February and it is official. California is out of money and cannot pay its bills.

    The situation's effects will be felt across California starting Monday.

    Lawmakers and the governor have failed to meet a self-imposed January deadline. On Monday the state begins delaying $4 billion of scheduled state payments, instead, issuing IOUs to everything from county-assisted programs including foster care and mental health services.

    State workers will start taking unpaid days off this week. Small companies providing services for the state will not get paid. Those payments are critical to keep them in business. Those services include food services and computers.

    One network security company will suffer after not getting $340,000 they expected to pay their workers.

    Public works projects have come to a grinding halt.

    People who filed income taxes and expect refunds will just have to wait as the state has suspended refunds.

    Pell Grant payments for college students have been stopped by the state. But, the UC system, the CSU system, and private colleges have said they will back those up and continue those for their students.

    The governor, legislature and other leaders will meet again to see if they are finally able to reach a compromise.


    Good luck to anyone that overpaid on their CA state taxes. I hope that you can find someplace that will accept those IOUs you'll be getting instead of a refund check.

    Given that the almighty dollar is in essence an "IOU", maybe the California government should start issuing their own "Dollars". They could call them "CAL Dolls". I think the average country boy would flock to the bank to grab a batch of 'em. Woops, isn't that what the 'Merican Dream is all about? I can see it now. The next big movie hit from LALA Land: "Goldie Bucks and the Cal Dolls -- 'Merica goes down and gets wild -- It's Hot, Hot, Hot under the collar -- See it now on wide, wide screen HDview every evening (sorry, no Free Popcorn)"...

    (Hope that's not too much sarcanol for ya!)

    E. Swanson

    If California cannot boast about having money in the bank, at least they have clean air, yet according to some it is not clean enough. Will probably have to cut services if they don't raise taxes.

    3 month T-bills are yielding 0.22% per annum. A much better deal than Madoff's people got. A safe haven for those who have lost much of their life's savings in speculative ventures.

    Is Cascadia ready? Does the migration northward begin before or after the Mexican economy implodes? BTW, my Arizona is on schedule to implode soon too. Now let's add some Southwestern drought and aquifers pumping sand instead of water. Maybe an earthquake for additional spice?

    "Whiskey is for drinking, water is for fighting", but the current Asphaltistan focus is on following that little white ball around the green, and keeping one's chrome penis polished to a high sheen...until we have machete' moshpits with countless screams.

    I'm off to watch the countless migrating Maine lobsters and Alaskan King crabs, bearing chocolates and bananas in their uplifted claws, as they scrabble in around the Sahauro Cactus and Jumping Cholla, People say it is not a mirage...

    /rant off

    Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

    first over the brink i guess..

    Robert on Calitics.com has a good post on this. He works sprawl and sustainability into it too. California used to be a nice place to live, from what I gather. The sprawl economy was always unsustainable, but what happened is, the people who'd already gotten theirs by the 1970's decided to pull up the ladder and screw the next generation with their Prop 13 tax revolt initiative. The boomers who passed this and their descendents who inherit their parents' low tax rates have so far been able to deflect the blame onto Mexicans and immigrant-loving Democrats, but it's nothing less than generational warfare. I'll bet they're still counting on a comfortable retirement. Good luck with that.


    California now faces the same problem. For 60 years we have based our economy on the production and consumption of sprawl. This worked well enough until the late 1970s, when those who had prospered the most from this model decided to stop reinvesting profits in the state and in society, and took their ball and went home. The next 30 years were dominated by even more sprawl, financed by massive amounts of debt and by eating the state's seed corn by slashing the government programs that built prosperity in the first place.

    This was always bound to end in disaster, and as we are well aware, that disaster - in the form of economic depression and government bankruptcy - is now here. But the massive sprawlconomy binge had another set of costs whose bill is now coming due - water.

    Two links up top are contradictory:

    Russia: Oil Output Declines, Price Stands Ground

    Production slid by an average of 60,000 barrels per day in January compared with the previous month,

    TABLE - Russian Jan oil output rises, exports fall

    Russia's January oil output rose slightly to 9.7 million barrels per day (41.01 million tonnes) from 9.66 million bpd in December

    We know it slid year over year, January 08 vs. January 09, but one link here says output fell when compared to December while the other says it rose comapred to the previous month which was December.

    My data from the Russian Information Agency says they declined about 25,000 barrels per day, December to January, but they failed to report anything during the second half of December so I am missing data for the last half of December.

    Ron Patterson

    Whether Russian oil production rose or fell depends on the source of information. Kremlin controlled RBC said production unchanged Jan 09 compared to Dec 08 but export fell possibly because of reduction of export tariffs from Feb on.
    This however does not matter at all what matters is that ruble breaks the exchange rate band to euro and USD as it is rapidly devaluated.
    That means inflation skyrockets while unemployment rises sharply and Russia has oligarch bailout funds - almost emptied - but no unemployment benefit funds system.
    My russian exile friends are convinced the so called "system Putin"
    will be toppled within short as social riot will flare up. Putin is merely an oligarchs' puppet.
    If so we can expect disruption of Russian oil and gas exports for period of uncertain extend.

    Halva, halva, halva.

    Hello TODers,

    As I discussed in previous postings, it is not looking so good for the Ukrainian I-NPK mfgs:

    Analysts forecast woes for mineral fertilizer companies due to rise in prices of gas, cancellation of export duties on mineral fertilizers by Russia
    Additionally, not only for safety and preventing pipeline corrosion reasons, but Russia extracts the sulfur from the natgas prior to pipeline shipment. I would imagine they then sell it at a pretty firm pricing, which is competitively detrimental overall to the Ukrainian metals industries and phosphate beneficiators, which only further leverages the Russian advantage over time.

    Hello TODers,

    As I speculated prior, confirmation now seems to be coming in:

    The fertilizer market has ground to a halt over the past couple of months as economic woes put a clamp on global food demand, but according to a co-authored report from UBS, investors in the sector can rest assured the downturn will be minor.

    Food prices may rise because a lack of credit for farmers curbed their ability to buy seeds and fertilizers and may limit production, Nestle SA Chairman Peter Brabeck-Letmathe said..

    ..“Many farmers over the world didn’t have access in October, November, December for credits,” the chairman of the world’s biggest food company said in an interview at the World Economic Forum in Davos, Switzerland, on Jan. 31. “They were limited in acquiring seed and acquiring fertilizer.”

    ..Prices of wheat, rice and corn rose to records last year, sparking riots from Haiti to Ivory Coast. World food production may drop in the next crop year as falling prices and the recession prompt farmers to lower investment and cut plantings, the United Nations said this month.

    ..“It is probable that in 2009 we have a decline in production and we will have an increase in demand,” the chairman said. “This will have another push on raw materials.”
    Have you hugged your bag of NPK today? This next link, from a prominent Wall Street blog, seems to think every American needs to firmly hug the resources of Canada for our mutual Continental security:

    Making Canada Our 51st State Could Make It Easier to Buy American

    ..But, in an overwhelming variety of ways- it makes a lot more sense than you might think.

    Did you even read your own link? 78% Canadians opposed? Besides, Texas would never allow it, at least half a dozen Cdn provinces are larger. Main reason is typical american arrogance, eg. to assume all of Canada would only qualify as a single US state. Go take over a country you can handle, and more compatible. I suggest Haiti, as Cuba appears too much for you militarily.

    Hello Lengould,

    Thxs for responding. Yes, I read the link and following comments. The article expresses the opinion of the author, not mine.

    Do you think JHK might have a heart attack watching this?

    Watching the Growth of Walmart Across America
    Over the weekend, I mapped the spread of Walmart using Modest Maps. It starts slow and then spreads like wildfire in the southeast and makes its way towards the west coast.


    That was very disturbing to watch.

    If you think that's disturbing read the following PDF file

    Not sure I have seen this posted here on TOD before...but not doubt it probably has been ... not much gets by this site

    Scarcity and Abundance


    Daily layoff list back to 12-10-08:


    Brazil has a new tanker converted to an LNG floating storage regassification unit. This may lessen their dependence on Bolivian natural gas.


    Very interesting rainy. I had not heard of FSRU's being developed. Not only handy for taking foreign LNG now but I wonder if it's also a lead to LNG coming off of their Deep Water oil play. Without a pipeline infrastructure Petrobras would have to flare any NG associated with those big oil reserves. Offshore LNG compression would be a massive and expansive plant but utilizing that NG would free up more oil for export.


    Here's an even more interesting bit of the LNG puzzle


    Long article but well worth digging thru. Apparently we on the threshold of a new era in offshore NG liquefaction. I doubt anyone has a credible global estimate of how much flared NG as well as stranded NG (lacking pipeline infrastructure/market) there is but I think it would be massive. There have been 100’s of billions cubic feet of NG flared just off the coasts of Nigeria and Equatorial Guinea in recent years.

    Granted it might take 10 to 15 years for such efforts to ramp up to a significant level but such timing might work well in areas where NG is a viable alternative to the negative effects of PO. If fact, I would chance to say that this new technology may be more important then any of the other solutions offered to PO at this time.

    LEANAN: If you think the link is worthy of an expanded discussion I’m in the process of summarizing the article and will be glad to ship it to you.

    I don't make those decisions. Send it to Gail instead.

    I can vouch for that. I am from Rhodesia.
    I moved my family to Australia when Bob Mugabe took over. I have not been happy since. You loose more than you might imagine. But you get to keep your life. The cost is high.
    I tried going back, but to truly get back one would have to get back to the past. There is a loss of continuity as well as place.