DrumBeat: February 17, 2009
Posted by Leanan on February 17, 2009 - 9:50am
As a consequence of living in a dynamic economic order, even the poorest person is wealthy to the most prominent member of a static economic order. Anticipating in theory, if not explicit words, Reagan's adage that "a rising tide raises all boats," the poorest person in a wealthy society is to allow potential resentments to be replaced by the creature comforts and the prospect for more, whether or not he is personally successful. Growth replaces virtue; material comfort stands in for solidarity.This has worked well in theory, but it has of late confronted a great material fact: there is no infinite growth within a closed system. Lately we have accumulated growing evidence of the rising costs of our pursuit of limitless growth, whether most evidently in resource depletion, devastation of plant and animal life, growing mountains and oceans of waste, the race to pursue growth through increased borrowing from the future, and even less measurable but no less evident features of our age that doubtlessly result from excessive vice (a.k.a. prosperity), such as rampant irresponsibility and immorality in nearly every facet of life.
If economic growth is most fundamentally the capacity to use and harness energy in more "productive" or "efficient" ways, then the accelerated use of energy must occur in spite of the fact that there is no actual increase in the overall daily input of energy from the sun.
The Oil Glut of 2009…and Why it Won't Last
The current oil price contains absolutely no risk premium. $35 crude price simply does not reflect how rapidly the oil market could tighten in 2009…or how rapidly prices could rise.Western nations are now experiencing the bow wave of a profound change in the current and future availability of oil. Oil output from all major Western oil companies is on an ominous decline trend. Exxon Mobil, for example, announced that its average oil output has fallen by 614,000 barrels per day in 2008.
Western oil majors like Exxon are finding it harder than ever to identify new prospects and successfully complete new oil projects. BP's Thunder Horse project in the Gulf of Mexico, for example, is finally coming online in 2008, with an anticipated output of nearly 250,000 barrels per day. But this one project has taken almost 20 years to complete, at a cost in excess of $6 billion.
And Chevron's recent success with its Jack 2 project in the Gulf came at a cost of over $240 million for just one test well. And this prospect is still years away from being a successful oil-producing prospect.
These sorts of developments have implications far beyond the Peak Oil argument, as valid as that thesis may be.
Obama OKs more Afghan troops, sources say
WASHINGTON - President Barack Obama has signed off on an increase in U.S. forces for the flagging war in Afghanistan, defense and congressional officials said Tuesday.
Chrysler asks for $5 billion more in loans
AUBURN HILLS, Mich. - Chrysler LLC says it needs another $5 billion to survive, and it will cut 3,000 jobs and three vehicle models as part of the restructuring plan it submitted to the U.S. government.
Fear factor: Oil tumbles, gold soars
NEW YORK (CNNMoney.com) -- Oil prices fell below $35 a barrel Tuesday, while gold prices jumped to a fresh seven-month high, amid concerns about weak demand for energy and increased safe-haven buying of hard assets.Light, sweet crude for March delivery fell $2.58, or 6.8%, to settle at $34.93 a barrel on the New York Mercantile Exchange. Oil for April delivery, which becomes the front-month contract when March expires Friday, tumbled $3.40 to $38.58 a barrel.
"Various concerns about the economy are weighing on the energy market," said John Kilduff, energy analyst at MF Global in New York. "The unsettling mood in the economy goes right to energy sector and concerns about demand," he said.
Kazakhstan Needs More Export Outlets, Chevron Official Says
LONDON -- The oil-rich Central Asian nation of Kazakhstan urgently needs more export capacity if it hopes to meet its ambitious plans for increasing oil production in the coming years, a senior Chevron executive said Tuesday.A rare bright spot in the global energy industry, Kazakhstan is expected to nearly double oil output by 2020, becoming one of the world's top 10 crude producers. But the landlocked country has few viable export outlets, with the bulk of its oil passing through Russia.
Norway's church says no new offshore
Norway's state church proposed a five-year moratorium on new offshore oil and gas licences for environmental reasons, joining a debate about opening more waters for exploration to sustain oil production.The moratorium proposal triggered an angry response by Norway's main labour union, LO, which fears that such a move would hurt the offshore services sector and spark mass layoffs at a time when Norway's economy already faces recession.
Ethanol plants no panacea for local economies, study finds
“Our research found lots of storm clouds that posed risks for ethanol plants, even though the industry was go-go-go at the time,” said Andrew Isserman, a professor of agriculture economics and of urban and regional planning. “The last 15 months have proven just how risky it is.”
Honeybees under attack on all fronts
THE world's honeybees appear to be dying off in horrifying numbers, and now consensus is starting to emerge on the reason why: it seems there is no one cause. Infections, lack of food, pesticides and breeding - none catastrophic on their own - are having a synergistic effect, pushing bee survival to a lethal tipping point. A somewhat anti-climactic conclusion it may be, but appreciating this complexity - and realising there will be no magic bullet - may be the key to saving the insects.
Less is more approach to fertiliser could boost farmers
Chinese farmers could cut their synthetic fertiliser use – and their bills – by up to 60% without harming their yields and profits, research shows.Using less fertiliser would also improve drinking water, soil and ocean pollution, and human health. Although nitrogen fertilisers often bring improved yields of crops, they can leach into drinking water, evaporate into the air, and trigger damaging blooms of problematic algae or phytoplankton in rivers, lakes and seas. On top of all that, nitrogen oxides are powerful greenhouse gases.
Parched China to slash water consumption by 60%
As rivers run dry and fields turn to dust, China has announced dramatic plans to cut water use by industry and agriculture.Water resources minister Chen Lei said it would cut the amount of water needed to produce each dollar of GDP by 60% by 2020. With the economy on course to grow by 60% by then, that effectively means it wants to consume no more water then than today.
Tampa Bay area's water supply is in 'severe' shortage
As the traditionally dry spring approaches, regional water managers are asking the state to impose the toughest watering restrictions in history.The reservoir that helps supply water to the Tampa Bay area is about a month from being drained, a sign of how dire the problem has become, officials with Tampa Bay Water said Monday.
Five places to go before global warming messes them up
● Global warming may ruin many of nature's wonders● Rising sea levels could make visiting New Orleans difficult in the future
● Glaciers in the Alps may melt by the middle of the century
● Encouraged by warmer winters, pine beetles are ruining forests in Colorado
Does America Still Have a Nuclear Industry?
The nuclear industry was born in America. But today while it’s booming in the rest of world, it seems to be dying here.In the halcyon days of the ’60s and ’70s, the three largest builders of reactors were all U.S. companies. Today, there is only GE and it is starting to lag far behind foreign rivals. Since last November, Exelon, the nation’s largest nuclear fleet owner, and Dominion, one of the most ambitious utilities in applying for new reactors, both announced they will drop plans to build GE reactors. Around the same time, Entergy, the nation’s second largest fleet owner, said it will “explore alternatives” to building with GE.
This means that GE, which was already running in third place behind Westinghouse, now a Japanese company, and Areva, the French giant, is down to one planned reactor.
How did we fall so far so fast? It’s actually been decades in the making.
GM, Chrysler to get $7 billion in bailout cash
DETROIT - The U.S. government will release $4 billion in additional aid to General Motors Corp. and $3 billion to Chrysler LLC on Tuesday as planned, a White House official said, ahead of the deadline for the automakers to submit new survival plans.GM was making progress Monday in concession talks with debtholders and its main union, but deals may not come until after the deadline passes, people briefed on the situation told The Associated Press.
Petrobras may cut financing below $4bn
Brazilian state-run Petrobras could reduce its 2010 financing needs to less than $4 billion on cost cuts, the company's chief financial officer, Almir Barbassa said.Petrobras could cut its remaining projected 2010 financing needs by more than half if the company can reduce costs by 15% Barbassa told the local Estado news agency.
EPA to review Bush rule on warming emissions
The Obama administration on Tuesday agreed to review whether it should regulate carbon dioxide emissions from coal-fired power plants, portending a major reversal of the Bush administration's policy on global warming.
Hurricane Gustav/Hurricane Ike activity statistics final update
Offshore oil and gas operators in the Gulf of Mexico continue to restore shut-in oil and natural gas production resulting from Hurricane Gustav and Hurricane Ike. This report will be the final one issued concerning shut-in production from these two storms.From the operators' reports, it is estimated that approximately 9.2% of the oil production in the Gulf is shut-in. As of June 2008, estimated oil production from the Gulf of Mexico is 1.3 million barrels of oil per day. It is also estimated that approximately 12.8 % of the natural gas production in the Gulf is shut-in. As of June 2008, estimated natural gas production from the Gulf of Mexico was 7.0 billion cubic feet of gas per day. Since that time, gas production from the Independence Hub facility has increased and current gas production from the Gulf is estimated at 7.4 billion cubic feet of gas per day.
Saudi Arabia sees no need to borrow to cover deficit
RIYADH - Top oil exporter Saudi Arabia sees no need to borrow to cover a projected budget deficit this year or any shortfall next year, Finance Minister Ibrahim al-Assaf said on Tuesday.He told Reuters in an interview the kingdom’s vast financial reserves would be its “first line of defence” to meet any deficits, adding public debt had fallen to below 12 percent of gross domestic product from over 100 percent a few years ago.
Huge oil slick from Russian ship heads for British coastline
Coastguards in Britain and Ireland were on red alert today after a Russian aircraft carrier spilt an estimated 1,000 tonnes of oil off the southern Irish coast.The spill, which happened as the Admiral Kuznetsov aircraft carrier was refuelling at sea, caused a slick that is now more than three miles long and almost as wide.
Corn Ethanol: A Health Warning
Switching from gasoline or corn-based biofuels to cellulosic ethanol--made from the stalks and stems of plants--could have more health and environmental benefits than previously recognized, according to a study of different types of transportation fuels.The environmental and health costs associated with cellulosic ethanol are less than half those of gasoline and of corn ethanol, the study found.
Algae oil developer OriginOil signs pact with US DOE
LOS ANGELES (Reuters) - Algae-to-energy developer OriginOil has signed an agreement with the U.S. Department of Energy to cooperate in research, the company said on Tuesday.Los Angeles-based OriginOil and the DOE's Idaho National Laboratory will work to validate the company's technology of growing algae for fuel in a "photobioreactor."
What will (and won't) save Detroit
Washington wants answers, but there are no simple solutions to what's ailing the nation's automakers.
Robert Hirsch: Peak oil - what do we do now?
The world is now in a period of epic economic chaos. People are disoriented and unsure of what it will take to restore their economies. Many serious economists, financiers, and executives are loath to even forecast when an economic recovery might begin. It’s easier for me now to understand how my parents and grandparents must have felt during the 1930s.But the peak oil problem has not gone away. World liquid fuels production reached a plateau in mid-2004 and has fluctuated within a relatively narrow range in spite of mighty efforts to increase world production. In mid-2008, benefitting from the work of Campbell, Laherrere, Skrebowski, Aleklett, Simmons, Robelius, Gilbert, Bentley, Al Husseini, Deffeyes, Koppelaar, Birol, and others, I came to believe that world liquids production might stay on the existing plateau for the next 2-5 years and then go into a 3-5% per year decline
Recently, OPEC cut back oil production in an attempt to stem the oil price decline. How much might their cutbacks delay the onset of world liquid fuels production decline? Assuming the plateau model and five years to the onset of decline, each million barrels per day of oil production withholding buys roughly three weeks delay, so a steady, continuing reduction of say four million barrels per day over five years might result in a delay in the onset of world oil production decline by maybe three months. That’s not very much.
IEA Chief Urges OPEC Against More Output Cuts
The International Energy Agency on Monday urged OPEC nations against cutting oil production further when they meet next month."If OPEC is aiming at rapid increases by cutting supply maybe it would not be good for economic recovery. We think OPEC countries should take a closer look at the market and make a flexible decision," IEA chief Nobuo Tanaka told reporters here on the sidelines of an energy conference.
Expert: Energy crisis will lead to conflicts in the coming days
PUNE: In the coming days, energy would be the single focal point for conflicts as compared to air, water and food, said Maharashtra Energy Development Agency (MEDA), director general Mahesh Zagade.Zagade was speaking as the chief guest at the opening ceremony of the three-day symposium of the first international conference on ‘Energy Engineering and Eco-balance,’ organised by the Mulshi Institute of Technology and Research (MITR), Pune here on Monday.
This conference, sponsored by the Johns Hopkins Bloomberg School of Public Health Center for Public Health Preparedness, will address the linkages between peak oil, climate change, our built environment, and the public’s health. Special focus will be paid to identifying the consequences as well as envisioning solutions and building resistance to what will be a great threat to public health.
Australian Energy Sector's Profits to Soar But 2009 Tougher
Australian oil and gas producers are expected to stand out from the crowd this reporting season, bucking the trend of falling profits thanks to record average oil prices in the second half of last year.A few companies, like Santos Ltd. and integrated energy company Origin Energy Ltd. will book healthy one-time gains after cashing in on the flurry of foreign investment activity in Australia's coal seam gas sector.
But, as Merrill Lynch said in a recent client note, 2008 will be "as good as it gets for the foreseeable future" for the likes of Santos, Origin, Woodside Petroleum Ltd., and Oil Search Ltd.
Transocean Net Falls After Oil Slump Cuts Rig Values
(Bloomberg) -- Transocean Ltd., the world’s largest offshore oil driller, said quarterly profit fell for the first time in more than two years after tumbling energy prices cut the value of some rigs and well-management services.
Bolivia pays a high price for nationalisation
Bolivia, the linchpin of gas supplies to the southern half of Latin America, is struggling to secure long-term investment for its hydrocarbons sector amid questions over its reliability as a supplier and uncertainty over demand from export markets.
Kazakhstan pays for devaluation
Minister for Industry and Trade Vladimir Shkolnik told a cabinet meeting on February 9 that the prices of basic foodstuffs had rocketed in the first week following devaluation. He attributed this sudden inflation to imported items, products made locally out of raw materials from abroad, and those whose production was funded by loans denominated in dollars.At the same meeting, the chairman of Kazakhstan's Anti-competition Agency, Majit Esenbaev, predicted further price rises for wheat products, sugar, cooking oil, fruit and vegetables, and for fuel. Esenbaev warned that some businesses might engage in profiteering and thereby "create an artificial shortage on the food market".
Russia investigates 4 major oil firms over prices
MOSCOW (Reuters) - Russia's anti-monopoly watchdog (FAS) said on Tuesday it had started investigations into four major oil firms -- Rosneft, LUKOIL, Gazpromneft and TNK-BP over high prices."Today we began four investigations," FAS head Igor Artemyev told a briefing, noting that the companies did not cut retail sales during the fourth quarter of 2008 despite falling world oil prices, and actually raised retail prices early this year.
"The companies simply threw a challenge to the Russian government by raising wholesale prices...against a backdrop of tax cuts," he said.
Exxon Consortium Suspends Future Sakhalin-1 Phases
An ExxonMobil-led consortium has started to suspend future phases of Russian Sakhalin-1 oil and gas production project, citing Russia's failure to give timely approval for its plans and budgets.Exxon spokeswoman Dilyara Sydykova told Reuters late on Friday that the Authorized State Body (ASB) had not given approval for 2009 plans and budgets, as well as for additions to 2008 plans for the future phase of Odoptu and Arkutun-Dagi developments.
Iran's crude exports to Japan in December reached 505,000 bpd, showing a 79,000 bpd increase over the previous month.According to a report by Japan's Economy and Commerce Ministry, the country's total crude imports in December reached 4.166 million bpd, showing an 8.3 growth over November.
Industry insider: China's petrochemical stimulus plan to focus on refining and chemicals
BEIJING (Xinhua) -- China's upcoming stimulus package for the petrochemical sector will likely focus on oil refining and chemical industries, while oil and gas exploration will not be touched upon, petrochemical experts said Tuesday.
Russia to Launch First Sakhalin LNG to Japanese Relief
Russian and Japanese leaders will jet to the Pacific island of Sakhalin this week for the debut of Russia's first LNG plant, a project the Japanese hope will advance their energy security despite its controversial history.Russian President Dmitry Medvedev and Japanese Prime Minister Taro Aso, with a delegation of senior energy officials and executives, will watch one of the world's largest liquefied natural gas (LNG) plants come on stream on Feb. 18.
Fuel and fertilizer prices also hit farmers hard in 2008."Most of our fertilizer nitrogen, which affects our farmers, is imported, so it's a world market we're in now, instead of based on natural gas like it has been in the past," said WW Farmers Coop Branch Manager Joe Haverkamp.a
Haverkamp attributes last year's exponential rise in fertilizer prices to the import costs. He says most of the chemicals in fertilizer are made in countries with more lax environmental regulations.
Venezuela Plans Big Boost in Oil Sales to China
Venezuela will be exporting as much as 1 million barrels per day of oil to China by the early part of the next decade, the Andean nation's foreign minister said."We have a long-term energy alliance for the next 100 years covering joint oil production, oil refining and the provision of a million barrels a day," Nicolas Maduro said in a statement Sunday.
Gazprom’s gas production insufficient
Sofia - Gazprom has published reports on its production volumes, described by the media in the country as ‘contradictory’. The Russian energy monopolist has been trying to conceal a failure to cover the projected production volumes of natural gas, Nezavisimaya Gazeta reads. The published report has shown 11.3 bcm shortfall of what had been initially planned.
Italy Suspends Total's Gorgoglione Development
Italian authorities have suspended Total Italia's license to develop its Gorgoglione field in the southern region of Basilicata, police said on Monday, the latest development in an ongoing corruption probe.A statement from the police said that the suspension of the license to develop liquid and gas hydrocarbons at the field, authorized by a judge, would last for one year.
Companies Halt Plans For Plants
TURNING THE SCREWS harder to cut costs and limit production, Dow Chemical and Huntsman Corp. are following Lanxess in deciding to delay the construction of big new chemical plants.Dow will push back construction of a chlor-alkali facility in Freeport, Texas. The company had wanted to replace nearly obsolescent equipment by 2011 with more energy-efficient units.
Shake-up hints at wider reform plan
JEDDAH // King Abdullah bin Abdulaziz’s shake-up of government on Saturday, widely lauded by reform-minded Saudis, relied for the first time on non-state and non-religious actors, seen as a precursor to a wider reform plan that aims to turn Saudi Arabia into a knowledge-based society, analysts said yesterday.“Although I think that there will be more changes in the pipeline, I believe that we are witnessing the rise of the fourth Saudi state,” said Saudi journalist Samir Al Saadi.
Physicist Professor Brian Cox has looked at the different strategies now being pursued to make nuclear fusion a reality. His personal assessment is presented on the BBC's Horizon programme.
Scotland’s future energy needs
The SNP has slammed the door on nuclear power north of the border while Labour in London has finally embraced it as the only credible option despite its obvious drawbacks and dangers.The Scottish Government, meanwhile, has planted its flag firmly in the green, renewable energy camp.
Scotland gives the appearance of being well placed to make the most from this, given the wealth of sea and wind power at its disposal. A boom in jobs and enough energy to fulfil the country’s needs have been the subject of bold predictions.
Green burials: A dying wish to be 'home for fish'
(CNN) -- Carole Dunham, 69, loved the ocean. Last July, she was diagnosed with cancer and had only a few months to live. Dunham knew her last footprint had to be a green one, and she started looking into eco-friendly alternatives to traditional burial.
Getting your hands on some green...stimulus
At least $8 billion is designed to help homeowners add insulation, replace windows and get better appliances. Here's how to get your share.
We need to start emissions debate
THE Australian Government commissioned, reviewed and reported on an emissions trading system four times in the past year, but it wasn't until now that it finally asked the fundamental question of whether we should have a trading scheme at all.This may sound like a Monty Python joke but it's exactly what the Government has done.
Oil exploration cuts may trigger fuel price surge when economies revive
PARIS: The combination of the plunge in oil prices since July and the global credit crunch has dealt a one-two punch to energy investments, setting the stage for tight fuel supplies and a renewed surge in prices when energy demand recovers, industry specialists warn.The investment slowdown "will most definitely" affect supplies because of the time needed to develop new sources, said Brian Puffer, a partner at PricewaterhouseCoopers who deals with the energy sector.
"In two or three years, if the economy comes on strong, you'll have a huge shortage, and that would create a spike in prices," he said.
Finding and exploiting oil and natural gas fields today requires more costly technology than in the past, and major projects often run into billions of dollars. They can take years to complete, and those that fall victim to investment cuts may not be ready when more oil and natural gas is needed.
Crude Oil Trades Near $37 on Slowing Global Demand for Fuels
The U.K. may face an economic contraction in the first quarter equal to last quarter’s 1.5 percent decline, the Bank of England said yesterday. Industrial energy consumption in Germany, Europe’s largest economy, grew less than expected last year. Japan, the world’s third-largest oil user, yesterday said its economy shrank the most since 1974 in the fourth quarter.“The oil price is reacting to the doom-and-gloom,” said John Hall, managing director of U.K.-based consultant John Hall Associates Ltd. “The U.K., U.S., Asia and the Eurozone are all contracting at a faster rate than oil is being produced, and the world is in a strong place in terms of oil stocks.”
Gunmen attack oil facilities in southern Nigeria
LAGOS, Nigeria – A private security official says gunmen have attacked two oil facilities operated by Royal Dutch Shell in Nigeria's restive south.It is not known if anyone was injured in the attack early Tuesday, nor if oil production was affected. Military and Shell officials were not immediately available for comment.
OPEC should cut oil supply: Iraq
DOHA — OPEC should look to reduce oil supply further if demand is insufficient to absorb supplies, Iraq's oil minister said on Tuesday.“If there is not sufficient demand for OPEC crude we will have to consider a reduction,” Oil Minister Hussain al-Shahristani told reporters on the sidelines of a conference.
Russia, China sign US$25B oil loan deal: Reuters
MOSCOW - Russia signed its biggest ever energy deal with China on Tuesday, under which its oil companies will receive US$25-billion in loans in exchange for long-term crude supplies, a source close to the talks told Reuters.The source said state oil champion Rosneft and pipeline monopoly Transneft signed a long-delayed deal to borrow the money from China Development Bank.
"The credit was provided by the Development Bank," the source said on condition of anonymity.
Kuwait Petroleum Puts Out Fire at Rotterdam Refinery
(Bloomberg) -- Kuwait Petroleum Corp., the state- owned oil producer and refiner, put out a fire at it’s Rotterdam refinery in the Netherlands, the second in less than a week.The fire broke out in one of two crude units at the site, Ian McConnell, a manager at the refinery, said today by telephone. The unit has been closed while an investigation is carried out, he said, without estimating how long it may be shut.
China aims to up oil output 1.2 pct in '09 - paper
BEIJING (Reuters) - China aims to produce 192 million tonnes of crude oil and 86 billion cubic metres of natural gas in 2009, up 1.2 percent and 13 percent, respectively from last year, an industry newspaper said on Monday.The China Petroleum Daily, run by state oil heavyweight CNPC, the parent of PetroChina, said that in addition to the 2009 crude production goal, equivalent to 3.84 million barrels per day, Beijing had set 2010 and 2011 targets of 196 million tonnes and 198 million tonnes, respectively.
Does the International Energy Agency Want Oil to Go Higher?
So, what exactly is the IEA advocating? On the one hand, he says we need to continue to produce more oil so that when growth resumes prices will not skyrocket. However, if oil producers continue to produce more than is necessary, price will stay low, and may go significantly lower. Many oil companies are struggling at current prices and it is necessary for supply to constrict when the price is this low. It would seem reasonable that the IEA would rather see OPEC cut production in an effort to raise oil prices again. If a short term cut in production from OPEC did in fact raise the price for crude, then more private and corporate producers would be enticed into the market. If they were successful in raising prices, then more investment dollars would be put towards exploration and when the economy does truly recover - there would be more supply to meet the growing demand. As many oil producing projects take time before they begin to actually produce, a higher price of oil now would likely make the spike in 2010 less intense.
While not overtly anti-Muslim, there will at least be an undercurrent in some of the American commentary about sneaky Arabs, evil cartels and national security. On Fox News, it probably will be overt. They might even go right over the top and ask the Alaskan Governor for her opinion.Yet we need higher oil prices. At $US40 a barrel in a world already capital constrained, it's not possible to attract the investment necessary for the exploration and development to fuel the global economy when the financial crisis passes.
Depressed Oil Prices Approaching Speculation of a Lifetime
Oil prices now trade at a five-year low.If oil prices overshot on the way up to $147, then the opposite is certainly true today with prices at $36 a barrel. At some point, crude oil will bottom; the odds of a spectacular bounce occurring is highly likely as global governments spend trillions of dollars at the same time to desperately boost economic growth in 2009-2010.
Fallen oil prices a chink in Sarah Palin's armor
ANCHORAGE, Alaska – Alaska Gov. Sarah Palin's first two years in office have been called a time of milk and honey, when the resource-rich state was flush with wealth from record oil prices.The second half of her term isn't looking so rosy as Palin faces her first major financial challenge as governor.
Chávez Looks Beyond 2013 as He Faces Serious Challenges
CARACAS, Venezuela — When voters abolished term limits for President Hugo Chávez over the weekend, they handed him a long-sought victory, one that could easily embolden him to step up his socialist-inspired visions for his country.And yet, major obstacles to that revolutionary dream lie ahead, in the form of sagging prices for the country’s oil and a sizable opposition whose strength is not eroding. Mr. Chávez, a consummate political survivor, even reflected this in his victory speech, focusing on more mundane tasks like improving government efficiency and combating violent crime, as if acknowledging the criticism leveled at him during the campaign and the limitations likely to be imposed on any grand plans for the time being.
Let's explore what defines the American car
To admirers, the American car is the ultimate expression of freedom, a terrestrial comet skimming across a barren highway.To detractors, the American car is a fuel-gulping beast, a steel behemoth that symbolizes industrial decline.
Love it or hate it, no other consumer product ignites as much passion or has had such a profound impact on every aspect of American life.
Yet the fate of the American car is unsettled. The nation's three homegrown automakers — Ford Motor, General Motors and Chrysler — are running on fumes, victims of a miserable economy, changing consumer tastes, a few painful mistakes and the pressure of foreign competition. Now Toyota, not GM, is the world's largest automaker. And the Obama administration is set to name a team to oversee the industry.
The reality we can't face is that one way of life is over and a new one is waiting to be born. It's been waiting, really, since the early 1970s, when God whacked the USA upside its head to announce that we'd outgrown our once-stupendous domestic supply of oil. I remember those fervid months following the OPEC oil embargo of 1973 (I covered the story as a young newspaper reporter.) The basic message was this: from now on we'll be running this show on other people's oil so we better start doing things differently. Back then, the not-yet-lost-in-a-fog-of-greed Baby Boom generation rolled up its tie-dyed sleeves and got to work doing a lot of forward-looking things: micro hydro-electric, passive solar houses, rural homesteading, the next generation of public transit (BART, the D.C. Metro), the first wave of urban gentrification....Then, in 1979, the Ayatollah tossed out the Shah of Iran, we got another dose of oil problems, and a year later, President Jimmy Carter's clear-eyed view of the oil situation as "the moral equivalent of war" got overturned in favor of Ronald Reagan's dreadful Hollywood nostalgia projector. As usual in times of severe social stress, the public got delusional. Mr. Reagan was very lucky. During his tenure, two of the last great non-OPEC oil discoveries came into full production -- Prudhoe Bay, Alaska and the North Sea -- and took the leverage away from the Islamic oil nations who had been making us miserable with their threats, embargos, price-jackings, and hostage-takings.
King coal losing his power in electricity industry
China is likely to continue cutting investment in coal-fired power plants as the lackluster economy may result in a power glut this year, but it will increase its efforts to build more nuclear reactors and wind farms to improve its energy mix, according to Zhang Guobao, head of the National Energy Administration (NEA).
Waterworld Dreams Realized: Oil Rigs Become Luxury Hotels
Morris Architects, a worldwide architectural firm with offices in Los Angeles (Morris is behind the under-construction Anaheim GardenWalk Hotel) recently won the top prize in a hospitality design design contest for their award-winning "Oil Rig Resort, Spa, and Aquatic Adventure," a design concept that transforms your standard Gulf Coast oil rig into an sustainable resort. Brilliant.
Region needs bus service, not convention center
Looking even a short 10 years into the future, it is easy to guess that we'll be in a lower-energy world with tighter resources and more people. The current economic crisis should tell us to stop trying to sustain the unsustainable. James Howard Kunstler, author of "The Long Emergency," says the post-"peak oil" future will be rough. Thriftiness of resources, natural and human, is what will move Northwest Indiana ahead. Switching over early to sustainability is the key to regional well-being.
Stimulus expected to add jobs to build new energy system
WASHINGTON — Many of the jobs that the economic stimulus would create are generated by the parts of the plan that also are intended to help combat global warming and reduce the nation's dependence on fossil fuels.The $787.2 billion stimulus plan that President Barack Obama will sign Tuesday includes the nation's largest investment to date in cleaner energy. More than $80 billion in spending and tax cuts will go toward renewable domestic energy, a better grid to transmit electricity, energy research and programs to reduce the use of fossil fuels, such as weatherizing homes and federal buildings.
Energy firms get go-ahead for UK wind farms
LONDON (Reuters) - Britain on Monday approved bids by energy firms to boost the number of offshore wind farms, potentially helping the UK to move closer to hitting tough renewable energy targets.The Crown Estate, an independent body which owns all the seabed within 12 nautical miles of the UK coast, said it was awarding exclusivity agreements to companies and consortia to develop wind farms on 10 sites in the sea around Scotland.
The ‘holy grail’ of biofuels now in sight
Scotland, S.D. - With one foot planted in a pile of corn cobs, Mark Stowers explains how agricultural waste, transformed into ethanol, will turbocharge the US economy, boost its energy security, and help save the planet, too.This holy grail of biofuels, called cellulosic ethanol, has been “five years from commercialization” for so long that even Dr. Stowers admits it’s become a joke.
But now the research director for POET, the nation’s largest ethanol maker, based in Sioux Falls, S.D., says that despite bad economic news and major obstacles, cellulosic’s time is near. Other scientists agree.
Ocean Less Effective At Absorbing Carbon Dioxide Emitted By Human Activity
ScienceDaily — In the Southern Indian Ocean, climate change is leading to stronger winds, which mix waters, bringing CO2 up from the ocean depths to the surface. This is the conclusion of researchers who have studied the latest field measurements carried out by CNRS's INSU, IPEV and IPSL. As a result, the Southern Ocean can no longer absorb as much atmospheric CO2 as before. Its role as a 'carbon sink' has been weakened, and it may now be ten times less efficient than previously estimated. The same trend can be observed at high latitudes in the North Atlantic.
Can geo-engineering rebuild the planet?
As global warming worsens, the idea of vast projects to alter the Earth's environment is moving from fantasy to necessity.
Tree rings tell of killer droughts
Along the mountainous spine of Vietnam grow ancient conifers whose tree rings tell of droughts lasting more than a generation that helped push civilizations toward collapse.
South Asia's largest rivers threatened, warns UN
[NEW DELHI] Water resources in three of South Asia's largest river basins are highly vulnerable, with millions of people at risk of increasing water scarcity, a new report has found.The report — jointly released by the UN Environment Programme and the Asian Institute of Technology — studied the Ganges-Brahmaputra-Meghna (GBM), Indus and Helmand river basins, all of which span multiple countries within the region.
North Atlantic is world's 'climate superpower'
IF EVER there was a superpower of the oceans, the North Atlantic, with its ability to control global weather systems, is it. The bad news is that this region also happens to be especially sensitive to the effects of climate change, so what is happening there could affect the world.
Tales of our environmental demise are greatly exaggerated – coal reserves are dwindling, and lower emissions will follow.
Biochar for Climate Change Mitigation: Fact or Fiction (PDF)
Soils are extremely diverse and dynamic, playing a fundamental role in supporting communities of plants, detritivores (which break down organic matter) and microbial communities, interacting with the atmosphere, regulating water cycles and much more. As we face the catastrophic impacts of climate change, efforts to “engineer” the climate are proliferating. Among these is a proposal to use soils as a medium for addressing climate change by scaling up the use of biochar. Unfortunately, like other such schemes to engineer biological systems, it is based on a dangerously reductionist view of the natural world, which fails to recognize and accommodate ecological complexity and variation.Research on biochar is clearly indicating that there simply is no “one-size-fits-all” biochar solution, that many critically important issues remain poorly understood, and that there are likely to be serious and unpredictable negative impacts if this technology is adopted on a large scale. Yet proponents still do not hesitate to make unsubstantiated claims and to lobby for very significant supports to scale up their technology.
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Denninger is reporting that the Russian exchanges have been closed.
US Futures markets well down.
Dow 7590 (-189)
S&P 792 (-26)
S&P is below 800. Only one day below this level last Nov, and only a handful this century (in late 2002). If the day closes below 800, it will be ready to retest the Nov low (about 750). At that point it'll have rolled back to levels not seen since about 1997.
How far can the wayback value machine take us?
Looking back, 1997 was a pretty good year. I could do worse than spend another year there, at least. :)
I wonder whether we are looking at PE Ratio reversion to single digits in this selloff or whether there will be a rebound and we wont see that till the next big selloff sometime in the next decade? (another Cyclic Bull in Secular Bear).
Nick.
Paleocon, kudos for your prescience today. S&P down another 37.67 to round out the day at 789.17 with the DOW ending at 7552.6 points, a decline of 297.81 or -3.94%.
Not quite new lows but getting close.
$787 billion stimulus, anyone??
and all stock markets spiraling.
But didn't WalMart do a great job.
Cognitive Regulatory Capture
n. Psychology.
A condition of conflict or anxiety resulting from inconsistency between one’s duty as regulator and one’s actions, such as regulating the banking sector and trying to become well-liked by bankers. If the condition persists, CRC can mutate into an infectious disease, leading to euphoria and irrational exuberance. Can be fatal to the economy if allowed to continue for many years.
Known cures: independence, professional distance, integrity, deep recession, depression, Paul Volcker."
- Edward Harrison on Tuesday, 10 February 2009
"Now Ned, them whores are going to tell different lies than you. And when their lies ain't the same as your lies... Well, I ain't gonna hurt no woman. But I'm gonna hurt you. And not gentle like before... but bad."- Unforgiven
I was in a WalMart the other day and a thought struck me. When I visited Lithuania years ago, they had these department stores that were basically left over from Soviet days. They were state-run, drab collections of all kinds of things (clothes, hardware, cheese, sausage, etc.) and they were really the only places to shop for many things. So, will WalMart become the "state-run" department store? Is it already with the huge US flags stretched out over the walls?
What Walmart has going for it is operational efficiency, highly capable purchasing agents, and an amazing merchandising and inventory system.
What they have going against them is a "Buy Chinese" business model. If and/or when the yuan floats free and the dollar crashes (a few years yet, maybe?), cheap Chinese goods won't be cheap anymore, so they'll have to raise prices and/or source goods elsewhere.
I actually think they'll do that as well as anybody, and they may survive just fine as long as they're not overly debt-saddled (I have no idea on that score). If things slow down one more step after that, and localization is required, then the big-box model will really struggle. A Walmart mini-mart by the tracks might still be viable though.
isn't walmart's business model built on high volume ? take away that high volume and what do you have ? hugh, energy inefficient warehouse style stores too close to each other with a few zombies wandering around in the dim light looking for economy size tubes of ben-gay.
What is the matter?
Russia cannot handle a market drop?
Are they tanked out?
Why don't they sell more oil and give the money to the people?
Russia's ahead of the game.
All stock markets are the last bastion of "private capital".
With no debt creation possible due to energy constraints,
stock markets are no longer viable.
"Any financial position that is permitted to leverage itself to 90% or more of Net Asset Value is a juggernaut of financial ruin both for itself, the economies and businesses within which it grows, and ultimately for the populations who permit their existence.
The self-regulating nature of free markets is defeated when excess liquidity is synthesized through the over-extension of credit derived from overleveraged asset bases. Supporting the value of assets through the exploitation of overleveraged financial institutions is a death-spiral of the first order. The toxicity of such fractional banking is now being off-loaded into the government layer, the layer of human hierarchy that is by definition supposed to be the last bastion of protection for citizens against such manifestations of abuse that encumber and render impossible the natural regulating effects of free markets."
http://seekingalpha.com/article/120869-rethinking-fractional-banking?sou...
It's not a happy day for libertarians.
Even they now have to admit that economic power doesn't confine itself to use within the boundaries of the economic realm, but is wielded to exercise control in the political realm as well.
But they're still desperately trying to keep alive the canard of "the natural regulating effects of free markets."
Yes, but doesn't that prove a libertarian's point of view? If government's power is small then wielding it in the political realm doesn't get you very much.
Such is the cognitive dissonance inherent in libertarian theory. On the one hand it touts a fundamental belief in "the natural regulating effects of free markets."
Market fundamentalists argue that, I suppose by casting some strange libertarian spell over them, markets can be insulated from the influences of politics and society:
But when these free-market fantasies don't come true, which they never do, they then turn around and argue that government exercises too much influence over markets:
It's like they want to have their cake and eat it too.
The other cognitive dissonance is that gov't can somehow fix any problem, and that it should of course attempt to do so.
Certainly Republicans are not Libertarians either. No Libertarian would promote a large central gov't spending lots of taxpayers' money, nor borrowed money.
Warning- broad-brush painting:
Republicans want debt to enable low taxes and big military spending.
Democrats want socially responsible taxes and debt to enable social programs.
In the end they agree on little except more debt and a bigger gov't, so that's what we get, along with a good bit of military spending, taxes, and social programs.
People at the individual level don't like that "stuff happens", at least when it happens to them. Too many are willing to be perpetual adolescents, like puppies at their master's feet, begging for affection and table scraps. Too many who sit a the table would rather kick those mangy curs begging at their feet.
I'd like to sit at the table. I refuse to sit and beg. Maybe the best I can do is bite some ankles?
Ben Bernanke has saddled the American public with approximately 7-8 trillion in financial obligations. I think many do not understand the size of these numbers. Is un-ellected and unaccountable Ben Republican or Democrat? I pose this question because the USA is so far down the rabbit hole at this point the Republican/Democrat my team/your team trip doesn't matter that much.
Therein lies the whole problem. The people have lost control of their government to a bunch of bureaucrats and "experts" who don't have the interests nor the values of the people at heart.
"Republicans want debt to enable low taxes and big military spending.
Democrats want socially responsible taxes and debt to enable social programs."
boener and mccain have been all over cnn squealing like stuck pigs because their ox is being gored, their golden goose cooked and their gravey train derailed.
70% of the national debt was created on the watches of the last three GOP presidents. Perhaps a fair amount of our economic pain is from us being burdened by the service of debts the pre-boomer presidents Reagan and Papa Bush passed on to this generation. Interest on the national debt is usually in the top 3 of budget categories. Often interest payments are nearly equal to the usual deficit.
Probably you should include unfunded mandates, and future entitlements like Medicaid and SSN in the mix as well.
Given the (lower than actual) reported inflation, much of the spending and debt in total dollars is always latter-weighted.
Even with GOP adminmistrations, how many of those budgets were put up by Demo-dominated Congress? Seems to me that there is plenty of debt blame to go around, and the real issue is that the gov't has learned that borrowing causes pain in the future while arguing about tax increases and spending cuts hurts right now.
Roll all the above together, and throw in a healthy dose of state, individual, and corporate debt (all for similar reasons -- I want my cake and I WANT IT NOW!), and you get a completely unsustainable debt servicing situation. Add leverage and high finance and it's completely insane.
So, we've found plenty of people to blame. Now what? Will the Demo Congress AND Pres fix things? Looks to me like they're still playing the same game. I suspect Obama will preside over more debt growth in 4 years than any previous president....maybe more than all put together.
Daniel Yankelovich also has written of what you speak:
Then some other entity over which the people have even less control will take over that function. Areas without law end up being controlled by mobsters, or warlords. JPM, and BofA, may just be their financial equivalents.
This is not necessarily unexpected.-Talking Head CNN.
That's the line I've been looking for, along with, "no one
could have expected this" and "there's enough blame to go around for everyone."
DC has "stopped fearing the mob." "Let them eat cake"
position is just waiting for that spark.
What's the point of "regulation"? To prevent wild swings? To prevent untoward losses for some participants? To provide steady income to those who handle the general business? To provide tax income?
Whip-saw value changes and abrupt losses with financial ruin for the imprudent IS a natural consequence, but not 'regulatory" beyond basic fear of loss.
Randomly changing rules by fiat and after the fact determining who can be allowed to lose is "regulatory" in an exceptionally capricious manner.
Where we have been and where we are now are not "free market" or "command market", but an odd mix of populist-driven safe-haven investing coupled with predatory loose-credit speculators and a oligarchical control structure.
The only broadly shared belief seems to be "nobody can be allowed to lose" which requires infinite growth. It doesn't matter which side of this unusual elephant from which a blind man approaches, the simple fact is that the elephant cannot continue to grow in an unbounded manner, and this beast is about as big as the species can get.
To over-extend the analogy, as this elephant gets hungry it'll get angry; some of the blind will be trodden, some will be gored, and some will just be crapped upon, but a lucky few will ride its back if they can figure out how to climb up in time. What they blind men don't know is that there are already a couple of 20/20 mahouts (Geitner and Summers?) on the back, each with a spike and hammer ready and able to stop the carnage, but they can't bring themselves to kill such a valuable beast, and so far as they're concerned the ride isn't all that bad.
I'm with Leanan -- I know I'm blind, and I'm not curious enough to go prospecting for starving elephants.
"The only broadly shared belief seems to be "nobody can be allowed to lose" which requires infinite growth."
Almost. Except that 1948 and 1974 seem to be two of
the only "good years" for the Bottom 80%.
The Bottom 80% have been set up to lose.
that's what the OptionARMS, min payment, negAm, no doc
loans have been all about.
The last of the suckers getting into the Ultimate Ponzi.
http://jessel.100megsfree3.com/sp.png
250 on the S&P is the only support if it breaks 740.
I like the Yahoo header comment on breaking 800, "The slide took the benchmark S&P 500 below the 800 level for the first time since the bear market low of November 21 ...". As if there was a recovery in between?
740 is still a ways away. I'm not much of a technician, but I can see people putting in short covers below 800 and under 750. Seems like it would take a long, slow slide to get to 250 though. A banking collapse could prod it a long, and bond collapse could push it more quickly, too, I suppose.
I gotta get my house paid off......
740 is still a ways away.
It closed at 850 Friday.
ING and MetLife, two near and dear corps to me
down 14 and 7% respectively.
Dan W is calling a bank holiday imminent.
If Obama, Geithner, Summers open their collective
mouths again, finalization of the Top8 US Banks
situation better be the first words out.
No it did not! It closed at 826.84. And as I write this it is down another 30 points to below 800. Asian markets fall as Japan's recession deepens
Ron
Excuse me. I stand corrected. It was approx 850
a week ago Monday. Time sure does fly, don't it?
"Japan’s finance minister ‘drunk’ at G7 There were headlines in Asia when the head of the Japanese finances made a rambling, incoherent speech at the G7 meeting. It is a sign of stress. The LDP knows perfectly well, they launched this mess. Instead of a sober assessment about the dire effects of the Japanese carry trade, Mr. Nakagawa got drunk and delivered a meaningless speech. He was under intense pressure from 2005-2008 to keep rates far, far below the rate of Japanese inflation just so the faux interest rates could continue flooding the planet with lending. Now, as things disintegrate for Japan, he has no means for changing the course of events. So he is giving up."-elaine Supkis
Everything now is all topsy-turvy. We live in a perverse (from my point of view, but I suppose from a banker's perspective everything is just peachy) era when powerful economic interests have gained inordinate influence over our government.
The solution to this is not to do away with government as the libertarians argue, but to wrestle away control of the government from those powerful economic players. This won't happen automatically, but it has happened in the past, and it can happen again. Politics is, always has been and always will be about the allocation of resources. Whoever controls government has a great deal to say over who gets what, and anyone who denies that simple fact of life is either three stands off bottom or just not telling the truth.
My ideal of regulation is to rein in some of the worst abuses of powerful economic players. Markets by and of themselves have never demonstrated an ability to do this, regardless of what free-market fundamentalists say.
To quote Niebuhr:
to me in terms i can understand regulation of the markets is like the gpl, as long as you can play nice with others you can do what ever you want. what the current dogmatic view wants is a bsd like rule less system where you can do what ever you want. the problem with the latter is that it ALWAYS ends up as the one with the most money becomes the ruler and attacks everyone else.
I am not a violent person.
I know there must be hundreds of thousands of perfectly ethical souls working in the banking sector.
But, considering bankers, I cannot refrain myself from shouting out something like this :
String 'em up! Tar & feathers, scythes & forks! Strip their assets!
Enough already.
lukitas
Denninger seems to offer a lot of hyperbole (a lot of "the whole nation is toast if this-and-so doesn't stop today!"), but I gotta say I learn news from him that I don't hear anywhere else. When was the last time you saw a Fox ticker or CNN headline about Russian daily markets?
Gold is heading up; stocks are heading down. We're sliding another step down the staircase of depression.
That is because Russian daily markets are not important.
They do not have a true market, but one based on the government.
Unlike ours....
US is on the path to government control of markets.
Get out now!
I've been out for awhile now. This market is for gamblers only, and I'm not one.
Exatly!
As Mandelbrot wrote in The (Mis)Behavior of Markets, "Real markets are wild... Extreme price swings are the norm in financial markets--not aberrations that can be ignored."
Over the past three decades, the finance industry has gone to great lengths to convince the people that the markets are a safe and reliable vehicles to assure their retirement, but it just ain't so.
Unlike ours....
Yeah. PPT.
PPT is BS, or at best a minor periodic player. Think about it.
And regarding Russia, their market is often closed, and in past year often limit down. (not saying things aren't particularly nasty today, only that their market closing is not as significant as the trillion dollar + purchase of dollars Sun night).
The POTUS Working Group.
I have thought about it. Lots.
Especially noticeable when watching immediate reversals
from LMT Down futures.
From reagan. The Fed can be a buyer of all asset classes:
#
#
Stock Market Manipulation - The secret maneuverings of the Plunge ...
Stock Market Investing 2009: Major Post Asset Deflation Themes ... The Working Group on Financial Markets, also know as the Plunge Protection Team, was created by Ronald Reagan to ... And they, with the guidance of the Fed, all of the banks got together when ..... class action suit against US authorities (PPT) for ...
www.marketoracle.co.uk/Article464.html
According to John Crudele of the New York Post, the Plunge Protection Team's (PPT) modus operandi was revealed by a former member of the Federal Reserve Board, Robert Heller. Heller said that disasters could be mitigated by “buying market averages in the futures market, thus stabilizing the market as a whole.” This appears to be the strategy that has been used.
Former-Clinton advisor, George Stephanopoulos, verified the existence of The Plunge Protection Team (as well as its methods) in an appearance on Good Morning America on Sept 17, 2000. Stephanopoulos said:
“Well, what I wanted to talk about for a few minutes is the various efforts that are going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the markets….perhaps the most important the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges and they have been meeting informally so far, and they have a kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem. They have in the past acted more formally… I don't know if you remember but in 1998, there was a crisis called the Long term Capital Crisis. It was a major currency trader and there was a global currency crisis. And they, with the guidance of the Fed, all of the banks got together when it started to collapse and propped up the currency markets. And, they have plans in place to consider that if the markets start to fall.”
well they've done a stellar job of stabilizing the CDS markets, SP Futures and financial markets in general these past months and keeping commodity prices above cost of production. Thank god for PPT!! (LTCM was over a decade ago - similar artillery is ineffective now other than buying treasuries which is not PPT but Fed)
such an entity would be used in a functioning social system when there was a temporary exogenous shock - totally useless against a systemic crisis and would just act as a wealth concentrator/transferer if actually used)
such an entity would be used in a functioning social system when there was a temporary exogenous shock - totally useless against a systemic crisis and would just act as a wealth concentrator/transferer if actually used)
Exactly what has happened.
We now have the greatest Wealth disparity in World
History.
Operation Ten Ichi Go Redux:
Japan tried a novel system: beggaring workers at home, constricting domestic lending to Japanese consumers while building the world’s most powerful high-value export behemoth on earth. Rapidly overtaking all other capitalist systems, the Japanese automakers, for example, grew during the ZIRP system to become the greatest powers on earth.
This delightful system of depressing wages in Japan so there would be no inflation while the export economy grew in leaps and bounds pleased the LDP members very much and so they tried to do this to infinity. Now, as the system collapses, they can’t get anything going since they slammed on Japan’s economic brakes back in 1994. The Japanese people can’t lead the world out of this depression. Instead, they are losing jobs and money at a faster rate than any other major economy." Elaine Supkis
Here is an article from that conspiracy rag, Bloomberg, where they mention the PPT AND the members of this shadowy operation.
http://www.bloomberg.com/apps/news?pid=2...
So it appears to be operational today.
Now the question is, do they sit around and play patty cakes or do they follow their presidential directive of intervening in markets?
I don't know, but I'm sure everybody can agree the have a pretty big incentive to do so.
Thanx for the confirmation.
Can we put this issue to rest now?
No one is more blind...
At the end of this phase of geopolitical dislocation, the world will look more like Europe in 1913 rather than our world in 2007.
Is this what we have come to, believing that the government is covertly controlling everything. If so we have truly reached a very paranoid state of affairs.
Russia has rules in place that mandate that they stop trading if their market drops by 5%, but only for one hour. From the Reuthers link:
We have very similar rules on most commodities and the NYSE has rules called "curbs" that automatically come in when that market drops by a given amount.
If the government could control the rise and fall of the stock market don't you think they would have acted way before now? The fact that the market is where it is today is proof that all that PPT crap is just that, a load of donkey doo.
Ron
Um, no. The comment was clearly about government meddling, not covert control of the markets.
The meddling is overt, not covert.
Well government meddling is called "regulations"! We saw what happened to the savings and loan business a few years ago when the government dropped almost all "meddling". And the same thing happened last year to the banking industry when the "meddling" was dramatically reduced. And there was surely not enough "meddling" in the Bernie Madoff case.
What we need is a lot more stringent regulations by the SEC and the Fed. If we had had that in the past there would have been no savings and loan crash, no banking crisis and no Bernie Madoffs. We do indeed need more meddling.
Ron
I wasn't talking about regulations. I was talking about bailing out banks that should be allowed to fail.
Banks should be allowed to fail. It is the only 'fast' way out.
Even if they all fall like dominoes.
This will be catastrophic for people in the Fire sector, and for investors in that sector, but it is the only way to salvage some of whatever else keeps human societies running.
Anything else will, I am sure, lead to long depression, hunger, revolution, counterrevolution, mayhem, war, strife and tribulation.
Bankers are parasites. They take the cream off the top. They are greedy, and they have pushed us into producing more and more cream.
Now most of the cream is eaten, and we are left with a world full or unnecessary people.
Woe the day television sets are reposessed !
Certainly we need stronger regulations, as clear, up-front guidelines for various classes of investment (like Glass-Steagal had, or more-so).
Regulating with advance notice and long-term hysteresis can help foster calm, relatively stable markets with confident investors. Meddling with markets with zero notice, changing rules on the fly, and rewarding avarice creates wild markets with gamblers seeking inside knowledge.
The gov't should set guidelines for the rules of play, not to determine the winners and losers via mid-game rule changes. We have national Calvin-ball now.
Lets not forget that the Republicans in Congress and the investment bankers were the ones who called for market deregulation. It was Phil Gramm (R-TX) as Chairman of the Senate Banking Committee that forced thru the changes to the Glass-Steagall law. The Republicans still don't want to admit that this is their fault. Maybe that's because it was part of the plan, since people will soon place the blame on Obama for the failure of the markets. The funny thing is, if the markets and the economy really tank, the government will need to step in in a much larger way, which would be just the opposite of the Libertarian goal of small government.
E. Swanson
"The Republicans still don't want to admit that this is their fault"
Because it happened on Clinton's watch and its chief architects were Summers and Rubin.
And Phil Gramm had no impact?
As I recall, the Republicans controlled both the House and the Senate. The President doesn't make laws. Besides, Clinton was a white Southern Democrat, who have long held the same philosophical outlook as the Republicans. Now that the solid South has tilted toward the Republican camp, maybe a more liberal faction of Democrats will be able to rise in opposition.
E. Swanson
To suggest that one party is responsible for the repeal of the 1933 Glass-Steagall Act is, to put it mildy,...........absolutely correct!
There are no major differences between the Partys when it comes down to voting in alignment with their major campaign contributers.
More than new regulations we need more employees at regulatory agencies. Since the GOP couldn't repeal regulations they have done the next worse thing by underfunding regulatory agencies. The heads of the SEC had to choose not to look closer at Madoff because of his good reputation and the workload was so large that they had no choice but to trust him.
Yeah, that'll fix things -- more bureaucrats. And where will they be hired from? The banks they are supposed to regulate.
Actually, many state Attorney's General worked really hard to reign in excesses and monitor investment firms, only to be actively thwarted by the Feds. You could argue that more Feds would hinder more than they would help, as long as they're all working for the agreed BAU.
Maybe what we need are rules that are simple enough that any idiot can detect subterfuge and penalties harsh enough to make breaking them unprofitable on average. Three strikes of malfeasance (heck, one strike) should invalidate a person from ever serving as an exec or board member or majority owner for a public company again.
The government wants to make the market fall.
It has to in order for the wealthy to get back in when it is down.
The people getting burned now are the average middle class.
Nowhere, the government is now controlled by the Democrats. The party of the rich??? Anyway, the very rich have lost a lot more money in this market crash than the average middle class. And the vast majority of them are still in. They are not waiting to get back in. Your comment is just stupid.
And from your comments yesterday, on the origin of oil, your revisionist history of Abraham Lincoln and WWII, I have learned to take everything you say with a grain of salt. I will not be commenting on anymore of childish posts.
Ron
No need for you to comment on my posts. Just read and learn.
When people take their money out of the market, then they can give it to the government
for the benefit of Obama and his people.
Republicans and Democrats are both for the rich (>$1 billion net worth), just a different set of rich.
Most people take the typical history books as gospel truth.
Most of the time children are more aware of the real truth because they are not
filled up with all the media brain washing of today.
I give a different view based on a non-biased view of the events.
When Darwin first spoke up, no one believed him either.
Congratulations on your bias free status. The planet has been seeking a purely objective arbiter of facts and matters of great importance. Please post your email and I will begin forwarding the inquiries your way.
About the rich losing money. They have a way to make it look like they lost money, so people will not get angry with them.
Obama had BIG money behind his campaign, yet the press would have you believe that the poor folks sent him their last dollar.
OTOH maybe they are right.
All the poor sent Obama their money, didn't pay their mortgages and caused the economic collapse.
Thanks Barry!
snarconol off.
Really? Might you provide some facts or links to back up these assertions? No doubt those who have money in the RTS would benefit from your insights.
Russian daily markets are important... from the perspective of global trade. What happens in Russia and eastern Europe has an effect on western Europe, and what happens in western Europe has an effect on the Anglo-Saxon economies, and what happens to the Anglo-Saxon economies has an effect on the Asian markets.
As the song says, "All around the mulberry bush, the monkey chased the weasel."
Europe is in a real mess and the peasantry (...err I mean the Bourgeoisie, can't tell them apart these days)are taking to the streets. Questions are being raised about the viability (either short or long term) of the Eurozone.
http://news.bbc.co.uk/2/hi/programmes/newsnight/7860511.stm
Nowhere, all ships are getting lower in the water as the tide moves out.
Zadok, Are you a priest in Europe?
Sweet!!!! Maybe all this turmoil will unlink the world markets.
Then we can go back to making our own goods in the US again.
Linked systems are filled with negative feedback paths.
When one fails, they all go down. Kind of like grid based power.
Nowhere, I've been a long time critic of globalization (perhaps not unlike yourself?), not for reasons of efficiency or effectiveness (or lack thereof) but b/c I think it is and ever proving to be unsustainable.
I agree, the end of globalization may very well have a silver lining. If it means having far more regional and local input into people's lives and a greater reliance on self, family and community for earning a living, then this may not be necessarily a bad thing. In other words, back to reality.
But the transition will be painful. And world history has shown that people don't react well to such dislocations. As much as decoupling will take place, everyone will be affected by the suffering experienced by others. (Unfortunately, not so much out of pity as preservation against violence. No man hath power like he that hath nothing to lose.)
FYI, I live on the east coast of Canada in a prime agricultural region (amid the fecundity of the Avon Valley near the Annapolis Valley in Nova Scotia). Interestingly, much was said in the Canadian media in 2007 when the sub-prime mess began in the U.S.A. about how insulated the US's northern neighbour was from economic hardships. Such wishful thinking did little to ease the disappointment of people once their sources of income began to dry up.
I'm hoping, for everyone's sake, that people will have time to adjust to the latest round of bad news.
Yet, I'm struck by the haunting thought that Thomas Malthus may be proved right after-all. And if our cities and burgeoning populations are fully dependent on globalized trade, then things could get very messy for everyone, very fast.
Malthus' logic & math are irrefutable. He failed to foresee the full implications of fossil fuel exploitation, mechanized ag & the so-called "green revolution," modern med tech, etc., is all. By delaying the onset of Malthusian collapse, these innovations only ensure that when collapse comes it will be all that much more dire, with billions suffering rather than hundreds of millions. The clever ape merely outsmarted itself, with all that techno-gimmickery. What's amazing is that technocopians who routinely post on TOD seem to think that "new & improved" versions of the same techno-gimmickry that got us into this mess in the first place, will get us out of it. The sad thing is that millions of species have to suffer for the clever stupidity of one species.
NICE! Can I borrow that? It sums up so much, so well.
Hello Darwinsdog,
Your Quote: "The sad thing is that millions of species have to suffer for the clever stupidity of one species."
Ruthless Earthmarines, Foundation, & Optimal Overshoot Decline; dedicated to minimizing the other species decline/extinctions as much as possible for the transition through the Dieoff Bottleneck. My speculation, of course, but who knows?
Russian Stock Markets Close for One Hour After Shares Tumble
Here is a link to a Reuters story on Russia shutting down their markets:
http://in.reuters.com/article/asiaCompanyAndMarkets/idINLH60782520090217
Has anyone heard anything yet on CNBC on this?
It is now official from Reuthers: Russia's MICEX, RTS suspend trade limit down
Edit: Sorry WT, I posted this before I saw your post above. But to answer your question, I have been watching CNBC all morning and saw nothing. However it has happened before, on October 7th of 2008.
Russia's MICEX, RTS exchanges suspend trading
Ron
He seemed to also be going on most of the night about an FX dislocation - bad enough to post a nuclear weapons montage in the comments section.
Poland meltdown..I dunno...FX in particualr hurts my brain.
RED ALERT: FX Dislocation In Process
Comments
Can anyone decode?
Pete
Something happened overnight. There was some discussion on CNBC this morning.
They spun it as generalized anxiety about the economy. Bad as it is in the US, it's expected to be worse in Asia and Europe. In particular, they thought Europe would be hardest hit.
Bloomberg thought it might be related to Woori Bank, a large South Korean bank that is struggling with debt and asked for a government bailout. Money started fleeing Asia. There's also fear that Eastern Europe will default on its debt. So money's pouring into the dollar as a safe haven.
Treasuries are up again this morning, supporting this view.
DJIA 5 ½-year low of 7552 set on Nov. 20.
Now at 7577.
I wonder if this didn't have something to do with it:
Russia, China sign $25-billion energy deal
http://www.theglobeandmail.com/servlet/story/RTGAM.20090217.wrussiachina...
Russia would not want to hold the rouble as it is collapsing.
Also looks like trouble in the Canadian oil patch:
Canadian Superior faces debt repayment deadline
http://www.theglobeandmail.com/servlet/story/RTGAM.20090217.wcanadiansup...
more bad news for our near northern neighbors:
"dana petroleum to acquire bow valley energy"
http://www.marketwatch.com/news/story/Dana-Petroleum-acquire-Bow-Valley/...
Wow...Kunstler is a true believer in Obama. He can belittle all past presidents (elephants or donkeys), but Obama walks on water. The fact that change is lacking is explained away by Obama holding his punches. That's B.S., he's looking for another way to inflate the buble, just like everybody else.
If you are a true believer in "Peak Oil" and all the negative things that come with it, you are on your own. The timing is the big unknown.
I'm not sure I want everybody to understand anyway. They might steel my life boat.
Yeah. For all his seeming pessimism, he's got faith in Obama.
The contrast between him and Denninger is quite striking.
Well, Denninger's a Republican, despite his criticism of Bush and Paulson.
Kunstler, not so much.
Maybe he's just giving him the benefit of the doubt for now? There were a few political cartoons that had people going "Hasn't Obama fixed this economy yet?" before he even took office! Give ol' Kunstler a few more months and I'm sure he'll start producing some Obama shreds.
Hello Substrate,
I am already saddened that Pres. 0**** & Tiger Woods didn't team up during the Inaugural to announce plowing the White House lawn and non-viable golf courses...
----------------
**** Press number 0 for zero-sum game going forward...let's not use letter O anymore when typing his last name; 0bama, Not Obama.
It would be fascinating if the MSM regularly started doing this as a way to semaphore-signal their Peak Everything alarm too, but I bet they are too stupid, lazy, and greedy.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I think ol' Jimmy has been dealing with his own self induced "psychology of previous investment" as he had been shouting Obama's praises in between bouts of guzzling at Obamas trough of Kool-Aid.
The fanatasies one projects onto others are the last to go since it usually takes a considerable amount of owning up before one can admit they got it wrong.
Still it reflects poorly on Kunstler to confuse the Obama's pendantic message of "change" and "hope" with the unbridled lust for power the man exudes.
I didn't find his projected hopes onto Obama to be objectionable. It is written with enough subtle Caveats, that (at least when I read it it was like) Kunstler: There is no reason to rule out the possibility that O might do X. He is just expressing that the possibility of X hasn't been eliminated yet. In no way, did he seem to imply a high degree of probability that O would take such actions.
On the contrary, Kunstler has been writing constantly as to "guide" BO in office.
As though he had an inkling of his agenda.
Hers a few:
"Mr. Obama's first task taking stage in the lonely Oval Office should be to get right with his own credo of "change,"
" The larger question for President Obama is: how can we collectively promote the reconstruction of Main Street, including all the fine-grained layers of retail and wholesale trade. High tech "solutions" are not likely to avail in this."
"We will not apologize for our way of life...."
This unfortunate phrase from President Obama's otherwise sturdy inaugural address"
It will be a sad day for Jim when he realizes all of his projections on BO are just that, HIS.
versus this direct quote from the President today:
I realize that these are just words, but I agree with Herbert that it's refreshing to have an adult as President.
The piper plays a sweet tune on the road to destruction........
What would you suggest? The opposite, perhaps?
Seriously, what is your advice? How exactly would you do things differently if you ran the country? What can you add to the conversation?
Obama is the messiah. HE will fix everything. :):)
Check back with him in 4 years. HE is not facing reality.
The long term view is to start the country over again.
Take away federal income taxes, and let local communities lead.
The federal government could be operated on $50 billion per year instead of $2 trillion.
Health care is the product of the federal govt. who created the dumb system.
Medicare and medicaid are a worthless joke. I can provide my own healthcare.
The schools are fouled up because of federal rules like no prayer in school and Roe v. Wade.
Another clue in the breadcrumbs leading to Nowhere.
Check the history. Schools were fine back in 1963, and run on less money too.
Then the feds intervened and screwed it all up.
Lemme guess: you are a white man. Correct? And you have no physical ailments or disabilities?
My ancestors lived in this land for thousands of years without the US govt.
Hmmm...Native American, then? What do your uniquely unbiased history books mention about those quaint, locally-run, Catholic boarding schools? Anything like this:
Soul Wound: The Legacy of Native American Schools
Yeah, I couldn't take Trigonometry in High School, because I had to take that stupid abortion class.
That must be it ... if we just Pray and Ban Abortions the world will be All Better.
That would be a good start. People have forgotten where we came from.
The schools of today are full of disrespect, abuse, molestation, and drugs.
I have not forgotten. We come from a drunken flying spaghetti monster.
"The schools of today are full of disrespect, abuse, molestation, and drugs."
If you want to see your words in action, c'mon down to Detroit.
The Democrats have run the schools there for 30+years.
75% dropout rate.
Genocidal sea voyagers in search of a more direct route to India?
People never learned where they came from. Less than 10% of the US population even believes in evolution. I don't think praying more is going to fix that problem, though ...
simkin, you're too pessimistic!
"15 percent say humans evolved, and that God was not involved."
http://www.cbsnews.com/stories/2005/10/22/opinion/polls/main965223.shtml
See? Things ain't so bad.
I'd say that causing students to believe in evolution or some big bearded guy in the sky shouldn't really be the bench-mark of a good education system. I'd be ecstatic if a typical high-school graduating class could get in groups of 4 or 5 students then design, budget and build a chicken coop, then analyze the success of the project and effectively communicate their experience to others.
Believing in evolution doesn't say much· Helping students being able to understand the evidence, make logical conclusions and use that knowledge to employ technology would be nice....but really I think that we'll need a lot of help from the spaghetti monster to achieve that.
We have had enough chicken coop designs displayed ad nauseam here on TOD. So, you should be ecstatic about that. (I am not)
I'd say that causing students to believe in evolution or some big bearded guy in the sky shouldn't really be the bench-mark of a good education system. I'd be ecstatic if a typical high-school graduating class could get in groups of 4 or 5 students then design, budget and build a chicken coop, then analyze the success of the project and effectively communicate their experience to others.
Believing in evolution doesn't say much· Helping students being able to understand the evidence, make logical conclusions and use that knowledge to employ technology would be nice....but really I think that we'll need a lot of help from the spaghetti monster to achieve that.
synchro, it's not a benchmark for education, but it may be one for critical thinking vs. susceptibility to dogma, demagogues, or superstition.
Tiktaalik?
please watch.
http://www.youtube.com/watch?v=94f2h-5TvbM
Due to surviving writings during the collapse of the roman empire, they held similar views that things will go back to normal if we get less tolerant of religions other then (insert one here).
We have big government because we have big business like American Peanut as well as the crooks on Wall St. Having a large population and a high technology society also calls for big government.
Our current health care system is a product of a mish-mash of different state regulations. Corporations have much more influence over state legislatures than even K St in Washington has over Congress. Our current system is set up to make big money for insurance companies.
When we look at American history we see that all those morning prayers in public schools (I'm old enough to remember doing that) didn't prevent the attack on Pearl Harbor, the great depression and the many deep recessions that preceded it, the flu epidemic of 1918-20, the Civil War, or any other war.
"....rules like no prayer in school and Roe v. Wade.
right, they should be allowed to pray for abiotic oil so that population control wouldn't be needed.
Reading Kunstler's blog can be entertaining but one shouldn't give him much (any?) credibility. Did you read his defense of the Israeli campaign of oppression & murder in Gaza a few weeks ago? The old guy's rants are becoming kinduv tedious, if you ask me.
I stopped reading Kunstler afer that rant.
Kunstler thinks bank holidays will be announced in his post up top. I don't understand how that matters or works in the age of electronic money.
People rarely go to the bank anymore at least I don't unless I have to cash/deposit a check. My social security check is deposited automatically and my debit card takes the money out automatically. I get statements over the internet. Many have their bills paid automatically or over the internet. It matters little if the bank is opened or closed.
I can get cash on my debit or credit cards at Walmart or many other places.
In the old days shutting the doors on the bank could stop a bank run, but nowadays no way. The only way to stop people from taking out money from bank or credit card accounts would be to shut down the whole system which today means the whole economy.
What would be the point? Confiscate all electronc money and start over? Makes no sense to me.
European Banks in Weakened Position After Massive Exposure to Risky Eastern European Loans
Canadian wind power expansion may stop after government voted to end subsidies
The alleged cause of our current mess is lack of access to credit so Kunstler thinks it is a good idea to cut off the supply of credit to everyone??? This guy has been so wrong about so many things he gives Yergin good competition.
I got an invitation from Citi today in the mail to apply for a $5,000. personal loan. Plenty of credit available if you have a good credit record I would think. The trouble is some people want to get overextended into debt and then when the going gets rough and they cannot pay, they blame the bank for giving them the money in the first place.
Some people have opened savings accounts in order to save for the things they cannot get loans for. They do not pay you much interest for it, but it might be there when you need it. If one makes a large down payment and accepts a higher interest rate anbd finance fees some might be interested in loaning money, if you have a record of paying on time, low debt, and are in a high enough income bracket.
Until the banking system went overboard with the easy credit Ninja game, it used to be a truism, that the only people who could get loans are those that don't need them. That implys if you are well off, you are considered to be a good risk to pay back the loan, otherwise you are SOL. I think we are reverting back towards the norm. Of course the conversion from an easy credit nation, to a tough credit nation will be really tough on the economy. I talked to a car saleman yesterday (we are considering trading an SUV for a hybrid -to be ready for the next oil spike). He related how he has customers trying to trade in vehicles with $21000 on the loan, but only $5000 blue book. No way are the banks going to approve a loan for $15K over the value of the vehicle! This really sounds like the end of easy living beyond your means via debt accumulation.
He also showed me a Range Rover, had a price of $34K on the windshield. Said he had paid $40K for it three months ago. But the asking price is riduculous, as he says the current bluebook is now $23K. This is really tough on both businesses and individuals.
Hello Enemy of state,
If you enjoy your knees in the breeze: you will be money ahead to keep the SUV for a long time [mostly parked; used occasionally for longer trips, hauling items or large groups]. Then buy a bicycle or E-bike, plus a used, small m/c, scooter, trike, or street-legalized Quad for your other short excursions. Obviously, this plan is not for everyone, but lots and lots of decent rides can be found for well under $750-$1,000.
Here's (yet another) interesting blog on investing and economics; today's update with this grim statistic (chart available at the link) Infectious Greed
Are you from Singapore?
What does the US get from Singapore?
Or is this just a sign that Southeast Asia is suffering?
Port of Singapore
The Gazprom downturn
Gazprom’s gas production insufficient
So it's looking like Simmons may not have lost it after all and just maybe 2006 was the final peak. Still will be interesting to read any refutation as this would be an absolute disaster for European energy security if true.
There will be a key post about this.
As pointed out before, gas production is tied to economic activity. I would be very surprised if last year's production goals for anything were met this year.
Yes, I know but I think I'm in the Simmons camp on this one but more than willing to be persuaded otherwise. Most gas experts mainly seem to believe that Russia cut gas exports for political reasons. Simmons says it was physical lack of supply.
I think you'd have to be nuts to believe that Russia froze half of eastern europe if it didn't absolutely have to and wonder if European governments know the true situation and that's why Russia wasn't hammered for its actions.
But I still hope Simmons has this wrong!
According to data from Gazprom they have 65 Gcm (Bcm) of nat gas storage facilities.
This is close to 12 % of their present annual production.
This should give them some flexibility to handle swings in demand, and it seems unlikely that these facilities were emptied by the end of 2008. And if they were, there should have been more cut offs.
Do you know of any source for up to date Russian storage covering the last few months? That would probably answer the question one way or the other.
For whatever reason Gazprom now looks like it won't even achieve 500bcm in 2009 - that's about 70bcm below target and 70 bcm, to give some perspective, is more than the entire UK current annual production. Or put yet another way , a volume of gas close to Germany's annual consumption, which was expected this year, will just not be there. Seems to me there really had better be an absolutely massive demand collapse or Simmons statement that "Europe is toast - cold toast" will come true.
Unfortunately I have no data on present status on nat gas in Russian storage.
If Russian/Gazprom nat gas production was to decline 7 – 10 % during 2009 this would be felt in the European nat gas market already this summer as European nat gas storage is being refilled.
Such a decline will also be felt in Russia as some customers may be cut off during periods of high demand.
If the decline is the order of 7 – 10 % annually this certainly is very serious.
In January Gazprom blamed the huge fall in production on the Ukraine dispute. Now we find Gazprom production down by about the same amount in February but this month they blame it on the global downturn...
What the Russian papers say: Crisis hits Gazprom
CDU TEK stands for "Central Dispatching Department of Fuel and Energy Complex". On their website you can find production rates of oil, gas, coal and electricity generation updated daily by all companies. Nothing about gas storage though, maybe they include it in monthly reports via subsciption.
Apparently (from yesterday), Gazprom is about 85% of total Russian production, so 500 billion cubic meters would translate to total Russian gas production of about 20.6 TCF per year (one cubic meter = 35 cubic feet), versus 23.2 TCF in 2006 (EIA). Assuming flat consumption of about 16.6 TCF per year (2006 rate, EIA), a production decline to 20.6 TCF would cut net exports by about 40%, with huge cuts in exports presumably occurring during cold periods in Russia.
BTW, our middle case is that both Norway and Russia will approach zero net oil exports (from mature basins) in 15-17 years. And of course the US has its own problem with fast decliners in our back yard--Mexico & Venezuela.
Hello TODers,
Bart's EnergyBulletin has an excellent, short essay by Robert Hirsch.
http://energybulletin.net/node/48095
-----------------------------------
Peak oil - what do we do now?
...Recently, OPEC cut back oil production in an attempt to stem the oil price decline. How much might their cutbacks delay the onset of world liquid fuels production decline? Assuming the plateau model and five years to the onset of decline, each million barrels per day of oil production withholding buys roughly three weeks delay, so a steady, continuing reduction of say four million barrels per day over five years might result in a delay in the onset of world oil production decline by maybe three months. That’s not very much.
--------------------------------
Yikes! This is a new approach to me on how to view how rapidly time is compressing for meaningful mitigation. Now throw in WT's ELM into this: we are rapidly heading to being caught between a rock and a hard place.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Bad news on the markets today.
My mother has lost most of her estate in the last 7 months. All down the rabbit hole. I was not given control so I could try to save some of it. The one who has control is apparently riding it to ground zero.
Now she is quite old and has very little left.They are already processing her for the nursing home. What is left will be frozen by the social services and court orders. I can do nothing about it. So this is one story of how it affects one personally.
What was to be my inheritance has now about vanished. I am the closest next of kin
We are on the edge of the abyss here in this country. IMO it will now start to speed up as the dominoes fall.
I read of no personal accounts on TOD of financial losses . Perhaps everyone else has bulletproof investments. Or its something better left unsaid? A meltdown of tragic proportions is unwinding.
The MM rates are ridiculous. The banks offer a pittance for your funds. A fraction of a percent. I believe banks have become useless entities. I went to open a new acct at a large bank. It was a big first floor. Had many offices and desks. One a few had people in them. It was like a deserted tomb.There were NO customers at the tellers windows. Looked like everyone one was waiting to be pinkslipped.
Airdale
I have no assets. I am fiscally insolvent, owing more than I am worth. That being said, I think somewhere along the line many people confused investments in corporations with saving. They further confused shareholding with speculating. They were deluded to think that 7% returns in a low-inflation environment was "normal" (deluded by Madoff and others who "guaranteed" such returns year after year after year). In my line of work, I hear the sob stories from farmer's denied the "right" to subdivide farmland into the next tract of exurbia who cry "that's my retirement". Really? Your retirement was predicated on a speculative real estate venture? Who is your retirement advisor? Donald Trump? There is supposed to be a relationship between risk and reward. We have forgotten about that. Based on this morning's market moves, this will be another refreshed course: the stock market is not a savings account, corporations can (do, should on occasions) fail and go bankrupt, past performance does not guarantee future returns.
And I think that was completely intentional.
The alternatives were unpalatable: paying people enough so they could save more for retirement, boosting Social Security so that much savings wasn't necessary, forcing corporations to provide pensions, putting them at a disadvantage in the global marketplace, or having people cut back on spending their whole lives so they'd be able to save enough for retirement. (Remember Bush telling us our patriotic duty was to go shopping?)
"Investing" was the answer. At least until the pyramid scheme collapsed.
Boosting SS would have been more borrowing, and forcing corps to support workers would have done little better (eventual nationalization as is coming for the auto industry), and would have required a complex system of import protections to boot.
That would leave better pay and less spending, which would have meant no "service economy" with production overseas.
A strong dollar and weak yen followed by a weak yuan, based on T-bill sales overseas, enabled the whole fiasco IMHO.
The only way out for an individual that I can see is zero debt or bankruptcy early during the deflation/jobless period and either a decent job or subsistence living during the eventual inflation period. Businesses need to make essential products if they're to survive.
Businesses around here are quickly getting creamed, though not in "bad" sectors or a struggling state. I know of two solid companies (immaculate credit) who have had their credit lines slashed. Once cannot grow, and the other is struggling to pay for over-borrowing on a new building bought a few years ago as sales were rocketing. The former is cutting staff due to lower sales and inability to pick up struggling competitor holdings, while the latter is cutting staff and expenses drastically and pushing the remaining staff hard to meet obligations during a sales decline as well.
The owners of both are prudent, widely respected pillars of the local community, and they are incredibly stressed trying to save their employees and salvage 25 years of hard personal work in each case. Most here would consider them "rich", but life isn't easy for either right now.
Not only does each such business lay off 10-20% of its people, it cuts back on office supplies, office plants, coffee services, cleaning services, phone lines, computer purchases, business travel, working lunches, and company parites. These cutbacks are decimating local small-scale service industries as well. Even with no further macro-scale problems we're a long way from hitting bottom as the current round of cuts percolates through the economy and unemployment spikes up and then benefits run out by next year.
What market do they conduct business in ?
One is vending and food services (sales down by business area is mostly stable) and the other is an industrial-part wholesaler (China/Mexico raw-goods manufacturing on one side, US product manufacturers on the other -- hit hard but recent cutbacks).
Neither is sexy, service driven, or in a high-flyer industry. Just quiet mom-and-pop-done-well sorts of companies. $20M or so annual sales.
IIRC, you're in the Huntsville area, so these businesses are dependent on the military budget, in large part, correct ?
I'm in OK now. Neither is based on defense. Food service is broad-industry based (everything from schools to warehouse snack rooms). The other sells to pretty much anything with a motor in it.
I was actually in Huntsville recently, and they're doing quite well except for the Toyota plant. New mall just went up, another is planned to serve the big BRAC build-up growth, and storefronts are still full. People are a little worried, but not like other places I hear about.
It's only a matter of time before Defense takes a hit, though, unless we start a much bigger war.
I agree, but it's the timing that's perplexing to me. I've only got another 20 years or so in the workforce, even if I have to work past the now-adjusted Soc.Sec.
I've been keeping an eye on the Huntsville area looking for my first job in the HVAC/R field. One online search agent I use had come up with only 1 or 2 positions at my level, since the new year.
Last night I checked the New Orleans area with the same search and come up with 4 hits at entry level. Unfortunately I haven't seen AlanFBE posting lately to do a 'field confirmation'.
I have posted a couple of times about my losses in the energy sector, which are reaching 75% in most cases. Since they are mostly stocks or oil trusts, they could go a lot lower if the markets tank, not on fundamentals but on market psychology. I have some gold but not nearly enough to offset these losses.
Meanwhile the short sellers are cleaning up. The infamous DTO double short oil fund, recommended here by some posters earlier in this crash, is now at $236 up from $21 last July. I.e, it was possible to protect your investments, even make a killing actually, by playing the short side.
But it is interesting to compare the stock market performance for ExxonMobil for example, versus Citibank since January, 2007.
Declining net energy is bearish for most stocks even and especially energy stocks that only 'appeared' to make money with high oil/gas prices but whose revenues decline faster than their costs structures - this is the case for the majority of north american based E&P companies. If oil stays at sub $40 and gas sub $5 a great many of US oil/gas companies will go belly up. The commodities themselves, (assuming functioning financial markets), will go up again, specifically and possibly dramatically so with nat gas, but only the lowest cost producers funding out of operations will rise commensurately - most of those are not publicly traded (NOCs in Middle East). XOM, COP and a host of others still are sitting on lots of cheap reserves and will make money until those reserves dwindle- but new reserves are more expensive than the commodity underlying them. Financial system is broken, which wouldn't be terrible in its own right but it is bringing hope of energy transition down with it.
Receding horizons are a bitch.
"...but new reserves are more expensive than the commodity underlying them."
but reserves can be aquired in the $10-15 range on bay street or wall street.xom has a pile of cash to do the acquiring. probably enough to buy up 2.5 - 4 gb.
that is part of the problem - firms like XOM thinking they can create oil with dollars. they CAN for their shareholders, but not for the world as a whole.
My opinion remains the same: 60% chance of one more major energy rally, 30% of none (i.e. financial implosion and/or nationalization of energy and/or removal of futures mkts) and 10% chance of two (more cycles). The time when institutions focus is on how many below ground resources exist is (long) past - what kind of flow rate (in the form society requires) that can be produced at a price society can afford will be the new metric- I would guess 2-3 years out that flow rate is going to be considerably smaller than our for-profit energy consultants and watchdog agencies have historically projected (and also lower than what they are currently projecting). It turns out above ground factors matter, and are impacted by the cost of below ground resources. Remember, all this in field drilling, nitrogen/water injection added to the illusion of growing production and better technology when what it really did was put more of what would have been the second half of oil into the pool of cheap oil that was the first half.
Reducing consumption is the ONLY way.*
*Or a dramatically reduced population or a % of population consuming more and the rest as serfs, etc.
i dont disagree, the ownership of these dwindling resources will probably shift from the over leveraged,less financially nimble to stick in the muds like xom, imo
There never was any hope of energy transition because there isn't any viable equivalent for transitioning to. There's far too many people for all to live on annual solar input processed via the chloroplast, photoelectric effect, & solar thermal tech (wind & the water cycle, etc., included). Just accept it & move on.
Ya know I just kick my self, daily, for not flagging down that UFO in '72 and offered him a cut in the business profits based on the propulsion system it used ! And you just got to believe that there would be a ton of spin offs from that ET knowledge base ?!?!
Which one? You don't mean the '72 Kingman, AZ, UFO do you? It crashed. Kinda hard to cut a business profit on a failed propulsion system.
Nawww, SW 100 Street & Highway 33, Nebraska.
This propulsion system worked just fine - from initial sighting location, at times in hover mode. and then mobile down wind SE with a right angle turn west and up, up out of sight out the top of the visible sky.
Yup, it would be REALLY interesting to see what kind of mess we could get ourselves in if we had that tech !
Oh! You meant THAT '72 UFO...
Untrue.
Three centuries ago human population lived 100% on renewable flows from the sun - now we are down to 10% and most of that is hydro. Eventually we will head back to 100% renewable again. When that day comes, the larger investments made into accessing renewable flows instead of temporary consumption will hopefully lead to less collateral damage for other species and ecosystems than if there is just a straight crash (energy and population).
One can never know DD - every decision has unintended consequences - big picture my objective is to avert overall suffering - if we can reduce consumption paradigm to be in line with natural decline and increased access of solar flows, that gives us more time to change culture to something of meaning and longer lasting. On the other hand, if we use that time to just dig more holes and consume more STUFF then you might be right. We won't know until we get there.
Three centuries ago human population was 625 million. Today it's 6,761.2 million.
Don't forget food, Nate. Food is important.
The operative word there being "hopefully." A better argument, IMO, can be made for the sooner & faster the inevitable human population crash, the less collateral damage for other species and ecosystems. Which averts the most overall suffering, ripping the bandage off the wound or pulling it off slowly?
What, in your reading of history, has given you reason to believe that Homo has EVER managed to volitionally & cooperatively change culture to something of meaning & permanence?
True enough. That said, who can be sufficiently confident of the outcome, what with all those unintended consequences, to be so dead-set on advocating one policy course over another? Suppose we agree to follow your recommendations and that course turns out to be disastrous. Can I take cold comfort in saying "Told you so, should have followed the precautionary principle and left well enough alone"? Lotta good it will do me, what with all of us being dead. Then again, we're all apt to be dead anyway, whatever we do or don't do.
In principle I agree. In practice, I'll keep plugging for a less bumpy transition.
I had an opportunity to visit a Pueblo community a year or so ago in NM. It was quite interesting. They viewed the "white" culture as simply transient, an unfortunate, destructive phase, and they're biding time as their ancestors assured them that "things" would return to normal soon. They're working hard to preserve their culture. Though not "permanent," it is about 600 years old. Like all Homo cultures I'm sure they have some skeletons in the closet, too. Perfection is not an achievable objective.
We would have to start by cleaning up the financial sector, so we can invent a sustainable fashion of investment.
On the one hand, we need to put very powerful people out of action (in prison?).
On the other, we need to be bloody inventive. We have to construct simple laws that work with human nature in such a way that only sustainable endeavours are encouraged.
This is a task quite above the heads of most of our current rulers.
Someone might be able to synthesise Adam Smith, Karl Marx, Sun Tzu and any other practical and useful insight about human nature so as to produce a practical general law for human beings.
But how could such a law be enforced, if we do not all become enforcers.
Humans (generally) do not commit crimes when in full view.
Absolute transparency from the part of the leadership requires absolute watchfulness from the led.
I have a nagging suspicion that any steps toward such transparency (between elites and populace) will not be achieved without major strife, possibly blood shed.
1. Eat.
2. Keep from being eaten.
3. Reproduce.
There you have it: three practical general laws not just for human beings but for all animals. These three practical general laws really are what it's all about. Who could ask for more?
I"m just glad I'm in the same office and same house that we were in when oil prices averaged $14 in 1998. An oil patch friend of mine is deep into new office regret. He signed a new lease in July, and put $100,000 of his own money into renovating the space.
I've been hearing increasing stories, from family, friends & neighbors, of elders really hurting financially. Most of them are having to draw down capital rather than living on return of capital - there is no return to be had any more. No big deal if done for just a few months. Keep that up for a few years and there is no capital left. I think a lot of them are starting to worry that they are going to outlive their retirement savings. If they were Madoff clients, they are already there.
Yes. I really think it's worst for retirees, at least at the moment.
Elderly New Yorkers angry as crisis hits poorest
The meltdown is just beginning. Some have had their pensions cut, but most have not. Most people still have faith that the markets will recover; the only question is how long it will take.
My parents have pensions, social security, IRAs, real estate. They started out with nothing, so are pretty frugal. Still, they are going on cruises, vacations, etc. They see the sudden drop in prices as a once-in-a-lifetime opportunity, and are going for it. I am not expecting an inheritance. If I get one, it will be nice, but I don't expect it, and never have. The possibility (probability?) that they would have to "spend down" was always there.
My sister bought a home in California, thinking it was a bargain, even though I warned her prices would drop further. She's now a bit freaked out, because prices did indeed keep dropping. She has a good job, and so does her partner. They have so much money saved up that they were over the FDIC limit (and their bank is WaMu - they had some scary moments for awhile there). They are still worried about paying for the house. (Which is a very nice house, I must say.)
I have not lost as much as many others have, because I took Stoneleigh's advice and bailed out (or at least moved to cash equivalents). Still, I probably lost almost a year's salary, compared to the market top. But since it was in retirement funds, it has not affected my day to day life. It's not money I was using. And retirement seems unlikely now, no matter how much I save.
I started a new job in 2007 and, based on advice I got here, declined the 401k. In spring 2008 I converted an old job's 401K into an IRA and left the account in cash until after the great oil crash. When oil hit near $30, i put everything in USL. What a gamble! It's enough to turn the stomach.
I think that, so far, my retirement money shrank by 10% from its peak, which isn't bad, compared to most people I talk to.
I also don't expect an inheritance, and never did. We never had much growing up. Whatever the family has now, I'm sure they'll need it as things get worse for everyone.
Don't worry. Dollar cost averaging vanguard index funds for the long term is still the best bet according to the motley fool on NPR.
/sarcasm
Diane Rehm's Show was full of optimists.
I'm off about 30% since Jan 08. Doing taxes is always a sobering event.
Been away for awhile. Is it particularly gloomy on TOD today, or has not reading for a few days perked me up?
The middle class watches their jobs disappear and their assets collapse (house prices, retirement funds, investments, savings) while at the same time millionaire bankers pay themselves bonus money from out of public funds. Sounds like a highly explosive environment just waiting for a spark.
On the other coast 20,000 California govt. workers to lose jobs
http://finance.yahoo.com/news/California-budget-crisis-cnnm-14376048.html
Sorry to hear of your circumstances airdale. I can only imagine many tens of thousands of similar accounts out there. The TOD family may be fairing better then the average Joe Sixpack. But maybe not. Many don't care to share the negatives in their own lives for a variety of reasons. I suspect there are more then a few here that appreciate your story as a parallel to their own lot in life at the moment and appreciate your willingness to share.
I leave you with a bit of unasked for advice. I always try to follow this logic when outside forces seem ready to upset my cart: for all the negative effects others have on our lives, the great majority of us are the root of our own successes and failures. And sometimes those outside forces can overwhelm and defeat us at times. But much of the time we let our negative feelings trap us. I have done so more times then I want to remember.
Adapt….evolve….overcome. Not always successful but always worth trying IMHO.
I lost more "paper money" in 2002 during the telecom meltdown than I will probably every see again. I thought I was prudent -- I picked a company to work for with good stock options that made real equipment selling for real money with good margins to real customers. But it wasn't enough -- I should have checked more into the underpinnings of the customer base, as those were built on the previous dot.com bubble of vendor financing for customer purchases and massive loans based on "build it and they will come" network deployments. I lost 99% of my company stock and 50% of the rest of my investments back then in about 90 days, and I haven't lost anything of consequence since then (after I picked myself up I quickly determined the whole country is headed for a dot.com style implosion).
All told, in real value I've lost maybe $25K total in the last 5 years. In paper value it's many, many times more than that -- stock value, stock option value, and real estate value. No biggie to me -- I can survive without the $25K just fine, and the paper money was never real anyway, though I rather miss it.
My difficulty is simply in convincing the rest of my family stakeholders that the future is bleak and consolidating is the right move. They aren't used to this coming from me (as I was an uber-optimist high-flyer for two decades), and are slow to revise their expectations as well.
The glass is half full...
I have been a TODer for a while. After getting the courage to explain P.O. to my wife, our home life changed for the better. We no longer fight over little things. We understand that we are in an epic struggle. As the lay-offs started, she gave me a knowing look and a comforting hug. We should be done with the mortgage this summer; I hope that is soon enough. Good luck to you all.
Airdale, I assume people's losses are just better left unsaid...after all, there was some discussion at times here on if it was right to profit on people's misery in regards to higher oil, fuel and food prices. Now the people invested in oil are miserable also?
I know I lost quite a bit in DBO ETF and PBW clean energy fund...making up for any profits over the past 3 or 4 years and then some. And let's not even talk about a 401k. I am still riding them to the bottom also...it's not that much anyway, don't gamble what you can't lose, right?
Hi Airdale;
Not knowing where my wife's 401K is at this point, or where it'll be tomorrow, I have been building part of my retirement plan with my hands, collecting glass and mirrors, building windmill and solar heaters, throwing a little bit of scratch into a bit of PV .. creating a backup toolkit, and then another backup toolkit, as people toss out valuable, durable items to make room for Ikea shelves and Flat Screen tvs. Tools, bits and blades should keep their value, if I can keep them from rusting. Glass and Mirrors are, I'd say, a highly undervalued asset.
The solar and wind gear is already starting to earn its own interest, and while I can, I'll just keep adding surface area to that stuff, and be picking up my check from the rooftop every week.
(I have some less quirky backups, but the $1000 Roth I'm keeping intact just out of either persistent hopefulness or morbid curiosity, I guess.. I could easily get another 180 watts with it instead...)
I've yet to pick up a HAM rig, but thanks for the referrals, I'll keep them for when I can start on that task.
Bob
Jokuhl,
After clearing some downed limbs I am now going to erect a long wire horizontally for my HF ham rig and start copying some traffic, check some nets and see if the chatter out there is same as what I see on the net. Looking for a more personal side in the ragchewing arenas.
Wish I was already into some alternate electical schemes. Maybe next payday I will start with a simple PV array and buildout from there.
Tnks fer the input,
Airdale
I've read enough to know your background but one man's alternate is another man's fringe so I'm curious what you mean ?
Hi Airdale. How's the cleanup after the storm coming along?
Here's my "personal account" of financial loss, since you asked. Back in the '90s I had a good income, relatively speaking. I figured that I could make some $$$ investing, so I studied up on how to go about it. On Saturday mornings my wife & I would go to the library & study Value Line, since it was free from the library but cost online. We'd calculate betas, & stuff like that, then call our broker with buy & sell calls. As a biologist I was tempted to invest in biotech companies but decided I'd keep it conservative and invested instead in pizza chains, paper companies, banks (Banco Santander), etc. Believe it or not, we made quite a bit of $$$ during the '90s. But when the dotcom bubble burst & it all became complicated, we decided to give it up. We cashed in our investments about the time Bush stole the election & haven't played the markets since. We cashed in our investments... except for what we had in tax deferred variable annuities, that is.
Since that time, on occasion I've been forced to take the tax penalty & withdraw $$ from the annuities in order to make mortgage payments (the property is now paid off). Whenever this happened I really hated having to pay those penalties, and avoided doing so whenever I could. But now those annuities aren't hardly worth anything! Not because I drew them down excessively, but because they've lost so much value in this economy. Now I wish I hadn't been so frugal. I should have taken the penalties, cashed 'em out & spent the $$. Hindsight is 20/20, eh?
DD,
The crews have left,all but the local line equipment. I think it became too expensive to use off site folks. The volunteer cleanup crews have also left. Don't know why because its still like a jungle out here.
Some still without power. Lines still laying across roads.
Our state is negative about 500 mil on the budget so they just put a heavy tax on ...what else? Tobacco and alcohol. Exactly what many turn to for solace in bad times.
Now my good friend who owns a business is starting to box up and shutdown. He and his wife are likely to go of biz owning money. They are at a total loss to understand this. They are going to have to sell some very good inherited farm land and the prices look to be dropping. Not good.
FEMA is going to 'costshare' some of the dozer work on farmers fields where the wood lines are trashed. They will push huge amount of wood into pushup piles and burn it. A waste.
After all this is over I think many people will be in very bad financial shape. I suspect number of suicides will increase.Health will fall due to lack of money.
I am starting to see real effects locally. Most won't talk about it for its painful. Well pumps are dead in many homes. HDTVs are taking big hits. Lots of PCs bit the dust. Mine survived.
And today the commodities took a big hit. Soybeans down 26 points. Wheat and corn down a lot. Don't know where the hell that is going.
Airdale-a lot of doom and gloom, sorry about that. Maybe the sun will shine tomorrow.
All that wood going to waste. Next winter, folks might want it for heating. My neighbor had a pile of wood in his yard, which he proceeded to bury with a trackhoe. Then, he put in a wood stove and started cutting wood off the surrounding properties, which weren't his. What a fool!
If you could get with your county government, they might be able to setup a clearing house for firewood, maybe a co-op. I'm sure they are paying poor people for home heating assistance. Why not just cut the wood and give it away next winter instead? I know, that's too simple and smacks of SOCIALISM!!
E. Swanson
Socialism! Say not so!
It seems to me we went from "it's a bit tacky to be overtly greedy" to "it's OK to be a bit tacky and overtly greedy" to "you are strange and dangerous if you're not a bit tacky and overtly greedy."
Somewhere in the early 80's, I'd say.
Wow, sounds like a great setup for a biochar/terra preta project, though your soil is probably really good anyway. In Kinshasa, DRC, people actually make a living by trucking cooking charcoal into the city. Maybe there is some money in this tree catastrophe?
Just last night I was looking at my portfolio. I'm down about 25%, little more after today is done. Major losses are in our 401k plans which have very limited investment options. For too long both my spouse and I were suckered in on the company match. We also have a significant portion invested in oil & gas which is down, but I'm long and believe it will go up. Only other sector we are heavy in is utilities, which have done best of all. Still, I hardly belive that the gov't will not resort to monetizing the debt. Firmly believe we are in for hyper-inflation. Started investing only in bullion over a year ago.
Airdale, no one has been left unaffected by this and in my line of work, I'm hearing more and more about lost income and lost security. Rest assured, you are not alone.
The global stock markets and financial system, for good or ill, has been democratized to a much larger extent than it had been in the 1920's and 1930's. Contributors now include pension funds, municipal accounts, church endowments, credit unions, and a host of other small town and small time investments.
To some extent, almost everybody bought into the gamble. Why the silence? Perhaps misery, it turns out, does not like company after all.
Thanks Airdale for sharing this. Our hearts go out to you.
My sympathies for your losses, Airdale, and all the others who have lost as well. I'm sorry you have to go through this as well as the hardships you've had to endure the past few weeks.
My mother's estate would probably be almost gone if she had lived the past 5 months. she always said she didn't want to live her old age in a depression (she was 87 and a child of the 1930s) and so she decided to go leave us right after the week of the Lehman collapse and the AIG bailout! Seriously, she had Alzheimer's and got a pneumonia that wouldn't respond to any med. she died peacefully in hospice a few days after admittance to the hospital.
Whatever she had left was put in cash and the broker who handled her account did a good job of preserving what she had the last year or so. this is going through probate along with her other few stock assets. I will split that as well as annuity with my brother. It is a number under 6 figures but I'm' thankful I'm getting it. I'm just thankful now that all of her money lasted long enough for the years she needed the care she did.
my own story is that I've lost half of my IRAs--not 401K--since the peak in Oct/Nov 2007. I knew all along I should have taken it out but a bad family situation( not my mother)took a lot out of me in 2008. I'm going to now for whatever it will give me.
I'm a state retiree with a defined pension plan on an early retirement only 2 years ago. early retirement was because of some health issues and my mom issues. Nothing has affected that pension number yet, but I have no illusions that it probably will be affected at some point. I own my townhouse and so far can afford about whatever I need including property taxes. I always inteded to return to full time work when my Mom died but the chances of that are fading badly.
where I used to work, the whole agency may be going aways due to the state budget problems, not California, Arizona. At least our legislature was able to come to some terms about a budget deficit for 2009. but they haven't even begun to start on 2010 and what happens with 2011.
this is one personal story in this economic time, not a disaster but who knows about the future.
Peace,
Torion
and many thanks for the TOD site and all the people who put it up and all the posters. I've been reading you all since the beginning in 2005.
My sympathies for your losses, Airdale, and all the others who have lost as well. I'm sorry you have to go through this as well as the hardships you've had to endure the past few weeks.
My mother's estate would probably be almost gone if she had lived the past 5 months. she always said she didn't want to live her old age in a depression (she was 87 and a child of the 1930s) and so she decided to go leave us right after the week of the Lehman collapse and the AIG bailout! Seriously, she had Alzheimer's and got a pneumonia that wouldn't respond to any med. she died peacefully in hospice a few days after admittance to the hospital.
Whatever she had left was put in cash and the broker who handled her account did a good job of preserving what she had the last year or so. this is going through probate along with her other few stock assets. I will split that as well as annuity with my brother. It is a number under 6 figures but I'm' thankful I'm getting it. I'm just thankful now that all of her money lasted long enough for the years she needed the care she did.
my own story is that I've lost half of my IRAs--not 401K--since the peak in Oct/Nov 2007. I knew all along I should have taken it out but a bad family situation( not my mother)took a lot out of me in 2008. I'm going to now for whatever it will give me.
I'm a state retiree with a defined pension plan on an early retirement only 2 years ago. early retirement was because of some health issues and my mom issues. Nothing has affected that pension number yet, but I have no illusions that it probably will be affected at some point. I own my townhouse and so far can afford about whatever I need including property taxes. I always inteded to return to full time work when my Mom died but the chances of that are fading badly.
where I used to work, the whole agency may be going aways due to the state budget problems, not California, Arizona. At least our legislature was able to come to some terms about a budget deficit for 2009. but they haven't even begun to start on 2010 and what happens with 2011.
this is one personal story in this economic time, not a disaster but who knows about the future.
Peace,
Torion
and many thanks for the TOD site and all the people who put it up and all the posters. I've been reading you all since the beginning in 2005.
My wife has an aunt with a large amount of money who is in an assisted living facility with a severe brain disease. She has no children of her own so we are the sole beneficiaries of the estate. I'm not sure how much the portfolio has dropped so far but I know they've been moving a lot of it into cash equivalents. Of course everyone expects things to turn around eventually. We get a nice distribution every year, not sure how much longer it will last. We would be looking forward to a very comfortable retirement if society weren't about to collapse.
My personal assets are all in paid for rural land, greenhouses, solar panels, etc.
I have about 50 percent in cash. Am owning a pipeline stock as their earnings are not based on the price of oil and nat. gas, only derived from tariffs of volume flow, good dividends, complex IRS reporting procedures for cap. gain distributions. Had multiple stocks in order to get some diversification, multiple sectors. Paid off my debts last summer as I did not feel comfortable owing a load of debt. I wish I would have been less comfortable with the oil bubble, like it was not a good thing, but had diversified to avoid concentrated losses. Did not take the Madoff investment route.
Liked to read Benjamin Frenklin as he was a lender, and avoided going into debt. He invented the lightening rod, the Franklin stove, saved much life and property. He acquired wealth and printed words of wisdom.
An excerpt from Benjamin Franklin's writings (256K)
If one can make something of today, tomorrow might take care of itself. Similar to Jesus saying "Sufficient to the day is the evil therein." Benjamin Franklin might have said, "Do not put off for tomorrow what you can do today."
What little I had in the stock market I took out at 11,000 (about 2006 I think) and said I would wait until the end of 2008 before deciding to re-enter the market. Watched it go to 14,000 and wondered if I had been an idiot! But held fast to the end of 2008 decision making. Boy am I glad I did!
Put the money in CD's and at first got 4-5% interest which was just fine. Now that the Fed is holding interest rates hostage at below 1% I get almost no return on my investments. Retired on SS and am going to get hammered starting this year I think.
I am planning on investing in insulation this Spring. Have 70 year old uninsulated farmhouse that I am going to insulate walls to R50 (superinsulation).(Put attic to R38 2 years ago). Should get 8-15% return (savings on heating bills) on investment - And I don't know where I could get that kind of return anywhere else. And while the funds will then be illiquid, they will be reasonable safe from financial collapse - I hope!
Property tax increases and insurance (30%+ increases every year!) are the things that are really killing me financially. Another 30%+ increase this next year and I'll have to cut the insurance company loose and take my chances. Hell to be old and retired when these things happen - No chance to recover and no capability to cut & split wood like I could 10 years ago. Dandelion salad and cottontail for lunch and supper every day? Humm, ya, I can manage that if it becomes necessary. Wonder what the finicky city folks will eat? (Big Grin)
Can still get Dandelion in the city - and for cottontail just substitute "alley chicken."
"Dandelion salad and cottontail for lunch and supper every day? Humm, ya, I can manage that if it becomes necessary. Wonder what the finicky city folks will eat? (Big Grin)"
Each other.....
Some people around here would rather lay off county employees than raise property taxes.
Cheap food: macaroni noodles and tomato puree with small amounts of onions/veg/chiken scraps sauteed in corn oil poured over the top for flavor. The corn or vegetable oil is loaded with calories that are cheaper than from other sources.
Dairy farmers are getting 80 cents a gallon for milk, it costs double that to produce it. Hundreds of thousands of dairy cows are being sold to the meat packers.
http://www.google.com/hostednews/ap/article/ALeqM5iYU_1F-P1PoGgkJGfDG7NP...
The five top dairy states: California, Wisconsin, New York, Pennsylvania, Minnesota and Idaho are in a dairy market downturn.
Airdale - I'll add my story:
In the last year, I have lost my job, and 50% of my savings. I am getting unemployment, which is enough to cover my rent, utilities and even my car payment. I was a good saver while I was working, so although I lost alot, I still have enough saved to live on for a while.
I am still relatively young, which is a mixed blessing. I can still be retrained and find a new career, but I can't just ride out my savings. I am worried about my parents, and what will happen with them, as they don't have pensions or retirement benefits.
My mom died about 3 years ago. They were real CD investors, avoided the stock and equity markets like a plague. Now I feel bad, like I squandered the inheritance. It went into "conservative" things, like mutual funds, kids college funds (again mutual funds), and paying down/off the mortgage. Of course these things have plummeted in value. Even the mortgage feels like a black hole, house is paid off, but its market value is rapidly going down the tubes.
I lost about 35% of my portfolio but I am well diversified and long, about 20 more years long _if_ I have that opportunity. My cash is holding value but I can't expect that I will keep it for much longer if either my wife or I have serious health problems.
Good luck.
this stimulus bill is beyond the pale. out of total allocated only 35 billion for infrastructure!!! If this administration was serious about having a better future in 5 years+ they would be investing in nuclear plants, wind turbines, transmission buildout, piplelines etc. Instead most of it is going to be spent on $1 figurines at Dollar General via stimulus checks.
Steep discount rate addicts. Gimme more of the same please....
I seriously don't know what else can be done other than with other addictions - we're gonna have to hit rock bottom and have an 'intervention'. Not sure who will do the intervening; E.R. doctor, foreing govt, Mother Nature, or priest giving last rights...
Infrastructure takes too long.
This isn't the "better future in 5+ years" bill, it's the "get the economy going right now" bill.
I am actually surprised that that so much money went to rail and other infrastructure.
Huge projects take years to plan. And we just wasted the last 8 years.
Our governments need to get up to speed. Maybe if more road project planners posted about peak oil? Bryn Davidson of Dynamic cities has a great presentation on planning for the drop in road construction. Maybe he would do a series?
But is it enough to satisfy Kunstler and Alan from big easy?
http://www.politico.com/news/stories/0209/18924.html
Those who think Obama is only pushing ethanol should think again.
I read the stimulus as a stopgap measure. This is not the actual federal budget, which is potentially the "main attraction". The stimulus and state/local aids is meant to stop the hemorrhaging of jobs. The "shovel ready" concept means that the infrastructure projects funded by the stimulus had to be ready to go, now, or very very soon- all the engineering, EIS, sourcing, etc. worked out so that people don't end up leaning on their shovels whistling dixie. Addressing the actual ailments and wounds will be a much bigger project. Let's see some posts on how you would rearrange the entire $3 trillion federal budget.
http://en.wikipedia.org/wiki/United_States_federal_budget
http://www.gpoaccess.gov/usbudget/index.html
Much of the 2009 budget has not been passed yet. The Government is running under a continuing resolution until some time in March, AIUI. The stimulus will move up lots of projects, such as road building and re-paving into this year. We have a local road widening project which was pushed back into 2010, which I suspect to see brought forward into 2009. The project involves widening the main road out of the county from 2 lanes to 4 lanes, which will be a big boost to the local economy, provided there is still fuel to run the cars and trucks.
E. Swanson
I'm unemployed now. So in addition to living on the love of jesus, I will benefit from the stimulus bill in the following ways.
Monthly
UI increase = $106/month
COBRA assistance = $812.50/month
One Time
Child Credit 1 @ $1000
Tax Credit 2 @ 400
Tax Exempt UI $500
My total 2009 benefit assuming I'm not working all year - $10,778.50 - all of which will be spent in 2009. It's probable I would have spent that anyway, so we could debate whether or not it is stimulative. I could make an additional argument that taking that amount out of IRAs would have added a couple thousand more in liabilities which now won't have to be paid.
I usually pay about $35K a year in taxes, so I don't exactly feel bad about cashing the checks. I have a few bucks squirreled away since I could see this mess coming long ago, and I owned QID for the bulk of last year which put me decidedly up relative to the rest of the world.
However, I know people in similiar situations who could really use $11K right now and I know they'll spend it. So for those of you who are working and have the luxury of debating the pros and cons of the stimulus bill, enjoy your good fortune while it lasts. Because I know when your job disappears, you'll being staying up late on a Friday watching CSPAN-2 waiting for Senator Brown to get back from his Mother's wake and hoping his plane arrives birdless so that he can cast the 60th aye vote.
There's COBRA assistance? How do I figure out how to get it?
http://www.cobrainsurance.com/
You'll be notified by the COBRA administrator to only send in 35% or your normal premiums starting in March. The employer will deduct the 65% from their payroll tax remittance and pay the rest. The coverage will only be for 9 months. If you prepaid for March already, you'll receive a credit.
The new plan will also allow those who didn't sign up for COBRA because they couldn't afford it, a new open enrollment period so that they can now sign up, as long as they are still within the 18 month coverage period.
I actually read the entire bill, since I clearly have time to do so.
Click here http://www.house.gov/billtext/hr1_legtext_crb.pdf and start on page 396 for details. No sense in taking my word for it.
Good luck.
I feel better for John Thain.
FF
Thanks guys, that's good news. I just sent in my COBRA check for Jan & Feb today, will be nice to send in a smaller check next month.
Would be even nicer to find a job, but I don't see that happening any time soon.
More people caught skinny dipping as the tide recedes (as Warren Buffet put it):
http://www.nytimes.com/2009/02/18/business/18stanford.html?_r=1
Texas Financial Firm Accused of Fraud (another multi-billion dollar scam apparently)
Minyanville -- World Industrial Production and Exports Falling Off a Cliff
Excellent link Rain. More and more I'm looking at these "bail out" plans as being akin to tossing a vinyl liferaft to the folks aboard the RMS Titanic.
Im pretty sure world stock market capitalization is currently around $25 trillion...(was $36 trillion in October 2008)
Make that a very, very, small vinyl liferaft.
One estimate pegged global wealth in 2007 at $110 trillion.
http://www.bcg.com/publications/files/Global_Wealth_ES_Sept_2008.pdf
Included in their estimate: cash, securities, money market, offshore assets; not included: investor's own businesses, homes, luxury assets.
I cannot discern a 25 trillion dollar bank writedown. There is an undisclosed amount of derivative obligation on the books of major world banks. The number is in the trillions ... not sure tomorrow will be any better than today.
Venezuela invited Vietnam to participate in a 200,000 bopd project in the Orinoco Heavy oil belt (2/15/09):
http://vietnamnews.vnagency.com.vn/showarticle.php?num=05BUS140209
Hello TODers,
What's bad for the Big Three Auto Mfgs is also bad for Mexico:
http://www.bloomberg.com/apps/news?pid=20601086&sid=alXn.erQ3DaQ&refer=l...
-----------------------
Mexico Industrial Output May Drop Most Since 2002: Week Ahead
...Industrial production may have declined 5.7 percent from a year ago, the eighth consecutive decrease, according to the median estimate of eight analysts surveyed by Bloomberg. The government will report production, which includes manufacturing, construction, mining, electricity, water and gas, tomorrow.
Mexican companies and foreign factories that export to the U.S. are scaling back production and trimming payrolls amid a recession that began more than a year ago in the U.S., which bought 80 percent of Mexico’s $291.8 billion in exports in 2008. December exports to the U.S. dropped 19 percent from a year ago.
..The economy will be weighed down by the auto and auto-parts industry, which makes up about 20 percent of Mexico’s industrial production and is tied mostly to the U.S. and Canadian markets.
-----------------------
And they keep saying ..."Worst Is Yet to Come:"
Americans' Standard of Living Permanently Changed
http://tinyurl.com/atvtgp
Nice analysis; thanks for the post. Food sectors will hold, with people "trading down" and saving. Money quote: "You can wear last year's fashions, but you can't eat last year's food". Unless you know about canning, drying, freezing, etc.!
"I read of no personal accounts on TOD of financial losses . Perhaps everyone else has bulletproof investments. Or its something better left unsaid? A meltdown of tragic proportions is unwinding."
I have an equity mutual fund left in my RRSP which is down about 20% but the absolute amount of all my investments is only down about $20,000 or so, and only because of that one fund. Most of my investments are mineral rights (6% rate of return but just sit back and collect the royalty cheques), private-equity conventional-oil junior petes who operate only on cash flow (share value = book value, and the preferred shares pay 8%), step-up GICs from Alberta Treasury Branch (an arm of the Alberta government; deposits guaranteed 100% no limit), and an average of $100,000 cash sitting in my chequing account in case of sudden buying opportunities. Also I own my house free and clear and have no debts.
I've never made the big bucks that the Wall Street privateers did, nor have any of my investments ever made 10% or 20% a year. However, I have always been able to sleep peacefully at night, which is an aspect of investing that many people overlook in their mad rush to get rich quick. I might add that my wealth took me 25 years to get here, but as I prepare to retire a few years from now at age 55, I'm not going to be one of those poor elderly folk.
Last week someone mentioned a farm couple who have mineral rights and do nothing but maintain the pumpjacks to enjoy $86,000 a year and the easy life on a group of wells producing only a half-barrel per day each. To me, this is the success story of Peak Oil.
Why do I have the feeling that a nation that cannot manage its own domestic banking system may not be the best one to be engaged in the creation of "killer robots."
On the other hand, has anyone checked for wires coming out of Rubin? Batteries in Bernanke?
I just saw a poster for the next Terminator movie.. forgot to check if it was a Narrative or a Documentary..
Terminator: Salvation
http://www.imdb.com/title/tt0438488/
Kurzweil: Salivation
http://singularity.com/
“Ray Kurzweil is the best person I know at predicting the future of artificial intelligence. His intriguing new book envisions a future in which information technologies have advanced so far and fast that they enable humanity to transcend its biological limitations—transforming our lives in ways we can’t yet imagine.” Bill Gates
No comment. I don't even know where to begin...
Please believe me when I say I didn't post that in admiration.. I was given a Kurzweil article from Rolling Stone the other day, and his 'Man merging with Data in 2045' dreams were just a fine flipside to the Terminator teknobattle-nightmare. But both are fantasies that require more energy than we have.. so our hell will probably have to be in other flavors.
You didn't know where to begin.. Kurzweil doesn't think it has to end. Time to listen to ThreePennyOpera for some poetic injustice! (by Kurt Weill..)
Best,
Bob
I left my job in the semiconductor industry a couple years ago. At one big research strategy meeting, they handed out copies of Kurzweil's Singularity. I tried to check - is this meant to be an example of how stupid smart people can get, to inspire us to be careful to keep our feet on the ground??? Nope, seemed to be a book meant to inspire us with the glorious future and the role we might play in bringing it to pass.
I'm not sure where I go from here ... standing alongside of a few million other directionless souls!!! - but knowing a few directions in which NOT to go, that's a start!
Dear Abby has a letter from a man who loves his family, but not their materialistic ways of socializing. He wondered what to do, without seeming like a freak. Abby replied:
California's budget woes and the announcement that they are reducing prison populations by 40% got me thinking. As we reach Dmitry Orlov's collapse stage 3 and governments dissolve what happens to the large prison populations? I hope someone somewhere is thinking about these issues. I'm glad I'm in a relatively safe state (Vermont) and not near any maximum security prisons.
Most of those convicts are nonviolent drug offenders. They should be free, and we taxpayers shouldn't be paying for their room & board.
CNN reported the other night that the US has 5% of the world population, but 25% of the world's prisoners. "Three strikes" laws have resulted in people getting life in prison for shoplifting. I imagine budgetary issues will put an end to that.
I've always thought the setting for "Escape from New York" was an excellent idea for hard core offenders. I think I've posted on it before...
1. In a warm climate
2. No guards inside
3. Give them supplies for, say, 1 - 3 years, including food growing stuff, then leave them on their own to work it all out. They ain't getting out, so let them determine how they wish to live.
As for drugs - which I've never used - why in the world the same rules don't apply to them as apply to alcohol I will never know, though I suspect it has a lot to do with the alcohol industry... and fundamentalist idiots (not to imply all fundamentalists are idiots).
Blah, blah, blah...
Cheers
1. In a warm climate
2. No guards inside
3. Give them supplies for, say, 1 - 3 years, including food growing stuff, then leave them on their own to work it all out. They ain't getting out, so let them determine how they wish to live.
In other words, Australia.
Read "Journey to Sahkalin" by Anton Chekhov - his only non-fiction work that I know of. It is a documentary of the penal colony on Sahkalin.
They worked it out, but the result was discomfitting.
Read "One Day in the Life of Ivan Denisovitch" by Alexander Solzhenitzyn - who personally spent time in just such an environment.
There is a tremendous amount to be learned about our life ahead if we have the courage to see.
Cuba - They even have health care for all :)
Leanan -
While emptying the prisons of non-violent drug offenders strikes me as a good idea in principle, one must keep in mind that a sizable fraction of these people were marginally employable even during the best of economic times. Now that times are really tough, an even higher percentage of these will remain totally unemployable. As such, they will wind up on the welfare roles, the result being that they will still be a financial burden to the state. Of course, on average it costs about the same to incarcerate a person as it does sending that person to college, so I guess being on welfare is the less expensive alternative of the two.
But I think there is another more sinister dimension to this, and I think it has to do with the unspoken issue of what to do with people who are redundant, literally not needed. Whenever you have a situation where there are a lot more people than there are real (as opposed to make-work) jobs, you have societal stress, and where you have societal stress you have the potential for political instability. This stress grows exponentially worse as the gap between the number of people and the number of jobs widens. Thus, perhaps keeping more of the 'lower orders' in prison on minor offenses has less to do with deterring crime and more to do with maintaining political stability. People in prison are not on the streets engaging in politically motivated rioting.
Of course, our increasingly privatized and for-profit penal system has a vested interest in keep the prisons full, so there is a real conflict of interest here.
Which is, of course, why they were doing drugs in the first place ...
Redundant. What a quaint euphemism. We are all becoming quickly redundant. I think it was Rubini who noted a few weeks ago that the markets were doing their job of assigning value very efficiently, and they were in the process of assigning a value approaching zero to most Americans.
Ah, but the first two were likely much more serious, and all are felonies. BTW, shoplifting is similar to burglary in that somebody will likely get hurt if an attempt is made to stop the burglar/shoplifter. Crime is down after three strikes... I don't mind letting the non-violent druggies go, and I especially like the US program to transfer foreign criminals to their home country.
The other more salient question is "why do we have so many 3-strikers"? Even if you don't agree with a law, simple self-preservation would lead most intelligent life forms to behave differently. I guess "lifestyle is non-negotiable" goes a looonnngg way.
I suppose you could have early-execution programs instead of early-release, in order to reduce crowding and solve organ shortages at the same time.
One of those sweet little ideas currently suffering death by a thousand cuts. If what you say were true, there would be no global financial crisis, no lack of PO mitigation and no problem responding to ACC.
Paleocon, you incurable romantic, you!
Cheers
'..The other more salient question is "why do we have so many 3-strikers" ..'
We don't put any serious effort into curing addiction, or teaching alternatives to violence. Both are, in fact, celebrated, while education especially for minorities, is chronically underfunded. It's simple math after that.
Plus, it gets a lot of help from an economic model that depends on teaching consumers to become addicted to products, regardless of need.
Bob
Not all drugs are the same. Release EVERY SINGLE mary jane violater, drop the $15B Cali spends a year fighting weed grown on public lands, grow it themselves and tax it.
Hey! What d'ya know, they just balanced their budget!
This is the route Mexico is going to have to go. The current route of fighting (or pretending to in order to appease the Norteños) the narco-traffickers is a losing proposition. As the gulf oil fields deplete & the economy continues to tank, Mexico isn't going to be able to afford to wage a losing campaign much longer, & the US isn't going to be able to afford to subsidize the effort, either.
The Mexican Congress already passed a law legalizing some drugs:
But then guess who pressured then President Vicente Fox to veto the bill?
Oh well, as Porfirio Diaz said:
POT is the number one cash crop in Californication......
NUMERO UNO
It will not matter if they let the criminals go free.
After 2 more years of this mess, we will all be criminals.
Maybe the nits in Big Gov will come to their senses, only after the dollars are smacking them in the face?
All drugs should be legalized. All of them. Tax them if needed. Personal creation and consumption exempted.
All non violent incarcerated men and women on drug related charges, need to be released, as of yesterday.
Incarcerate the government employees and/or elected officials that wrote the laws, include the judges and prosecutors. Time for polite discourse is at an end. Nuremburg held even the judges and officials guilty for enforcing the unjust law of the Reich.
The unjust laws in this country are to be disobeyed. Taxes need to be withheld.
Civil Disobedience.......now.
If only.. I don't blame government. The gov is just responding to the draconian puritanical public. No politician (excepting perhaps from Haight Ashbury) dare be seen to not be super tough on drugs. It is largely a problem of our own making. But, I don't expect any sort of progress to be made for a long time.
I agree with the poster above to legalize marijuana. Regulate and tax it, drive the price so low that it won't be worth anyone's time to grow it illegally. Release of the people who were criminalized because of it would have been better off done before things went to crap because they'll now have nowhere to go and the risk of committing an actual offense is much higher. Other drugs - heroin, meth, acid, etc, that are really known to cause severe health problems and rage issues should remain illegal, though. They pose a real threat to health and safety. If Cali is really spending $15 billion/year on the effort - sheesh, what a waste.
"Other drugs - heroin, meth, acid, etc, that are really known to cause severe health problems and rage issues should remain illegal, though. They pose a real threat to health and safety."
What kind of hoopdy doo atitude is that?
Let's make alcohol illegal, cheeseburgers illegal, potato chips, TV, BAD DOCTORS, oh and while we are at it, autos as well. They kill over 40,000 people a year. Damn cars anyway....Come on, McDonalds kills more people in a year, than Meth, Smack, Acid or pot combined has in the last 1000.
The real threat to health and safety are people in your government, and their supporters, that are clueless to what goes on in the real world.
The real threat to health and safety? Every time you fill up your tank you contribute to killing people. Yes, YOU. But OH, thats invisible, so it does'nt count??
Guess neither Donald nor Ivanka wanted to hear the words, "You're fired!"
Oh, how great the fall can be.
Does this mean that the Trump won't be invited back to Larry King soon?
I doubt it. This is the third or fourth time he's declared bankruptcy.
But then, I doubt he's too worried about it. Money is easily lost, and people like him expect to lose it. They trust they'll always be able to earn more. They believe it's better to have the talent for making money than to be rich, because you can always lose your wealth.
Kinda like: "Easy come, easy go. Wonder what the poor people are doing today?"
This is from memory, but if I remember correctly Donald Trump published a book sometime in the late 80s where he said one should never give a personal guarantee on their business loans. Not too long after that he started to have financial problems and it came out that he was indeed on the note for some of his properties. With these guys like Trump it's all smoke and mirrors.
He managed to muddle through that crisis and bounce back stronger than ever. It will be interesting to see if he learned anything from that experience or whether he'll land right back in the soup this time.
Financier charged with $9.2 billion fraud
SEC alleges Robert Allen Stanford orchestrated a scheme centered on an $8 billion CD program.
http://money.cnn.com/2009/02/17/news/companies/investment_scheme_accusat...
Now crooks do not need guns, they just steal directly from people's accounts.
Return of jobless strains China
From memory: China is on course for $88 billion buildout for standard gauge RR & TOD vs the US spending only $8 billion.
Throw in full-on NPK recycling and narrow gauge SpiderWebRiding: the Chinese will probably adapt faster than us here in the USA. IMO, there is no shortage of work for building out very low energy networks, plus the Chinese are already the non-FF 'Kings of Logistics'.
Bill Moyers interviews Simon Johnson of http://baselinescenario.com/ at:
http://www.pbs.org/moyers/journal/02132009/watch.html
This is the former chief economist of the IMF saying - right out loud - that our nation is now in the grips of oligarchs, "vested elites," not unlike Korea or Russia.
Perhaps the revolution will be televised after all.
Wonder what insights PBS Frontline "Inside the Meltdown" will have to offer? It airs tonight.
http://www.pbs.org/wgbh/pages/frontline/meltdown/
Recession could lengthen the twilight of dial-up
I still use dial-up. The main reason is that the local phone company is a monopoly and there isn't much of an alternative, except wireless thru the cell towers, which would require a wireless modem and line of sight to the tower, I think. As it is, local dial-up costs $20 a month, while DSL is about $45 a month, so, over a year, DSL could cost quite a bit. Most of what I do is text anyway and I disable JAVA in FIREFOX to kill most of the adds.
E. Swanson
I'm paying $25/month for broadband. I went with "naked DSL" and voice over Internet for phone service. It would cost me more to get dialup, if it meant having to get a landline phone again.
Obama plots huge railroad expansion
$8 billion to high-speed rail, most of which was added in the final closed-door bargaining at the instigation of White House chief of staff Rahm Emanuel.
http://news.yahoo.com/s/politico/20090217/pl_politico/18924
Well now, how about that. It's about time, isn't it.
Meanwhile, I'm still 90 miles away from the nearest Amtrak station, where a single train comes by each direction each night - or at least it would be the middle of the night if it were on time, it is usually the next morning when it finally does get there.
It will warm my heart to know, while I'm waiting for hours in our station (if I can still find and afford the gas to drive there), that people can get back and forth between Chicago and Washington on high speed rail.
Banks Using TARP Funds to Speculate in Oil Futures
There were various instances where banks crashed from trading in futures/deravitives/commodities including during the years leading up to 1929-1933 market crash. During the Great Depression Congress moved to try to prevent another crash by passing the Glass-Steagall Act prohibiting banks from dealing in investment banking activities. During the Clinton administration some of these strict rules were repealed. This lead to banks engaging in the type of speculation that caused the collapse of Enron, AIG, Lehman Bros. etc. The superbanks and others have trading units that might take down bondholders, stockholders, depositors money, tax obligations everything else with them if they guess wrong. They are allowed to bet on LIBOR rates, commodities prices, risk of credit default, anything they like without much regulation. A roll of the dice, but no useful service provided and some traders on margin without enough funds to back their deravatives should the market move in a direction not predicted.
SUPER REGULATOR: A COMPARATIVE ANALYSIS OF SECURITIES AND DERIVATIVES REGULATION IN THE
UNITED STATES, THE UNITED KINGDOM, AND JAPAN Jerry W. Markham (471K PDF)
Todays science and alternative energy tidbits:
Chinese Solar firms want feedthrough tariffs cut?
If I read it right, the Chinese solar industry is asking for the price the government guarantees to decrease faster than planned. I find that staggering. Any western businesses would want to extend the high prices in order to
Get filthy rich fromprofit from the windfall.Indian Scientists Capture Carbon with Bacteria
The important numbers are missing. At what cost? What fraction of the carbon in the smoke stack can be used?
Molecular Wires to capture light
Yet another lab demo, that will probably never become a product?
Climate "flickering" ended last Ice Age
Will they call it wood? Or is that, like Windows, already a trademark?
Hello TODers,
Is Cascadia ready?
http://www.usatoday.com/news/washington/2009-02-17-obamahousing_N.htm
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Housing picture grim in Phoenix metro area
..Census numbers show that a record one in nine U.S. housing units are vacant, including about 3% of owned homes.
The Mortgage Bankers Association says more than 2 million homeowners faced foreclosure last year. The median sales price dropped 12%, according to the National Association of Realtors — far more in parts of Arizona, California, Florida and Michigan.
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That is a lot of families either homeless or moved in with relatives.
Hello TODers,
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0LmLtYf8nQY&refer=home
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Feb. 18 (Bloomberg) -- Asian stocks dropped for a third day, driving Japan’s Topix index toward the lowest close in 25 years, as the deepening global recession hurts corporate earnings and demand for commodities.
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IMO, I would expect other markets to follow this downward trend; we are going to wipe out the efforts of many investing generations on the Hubbert Downslope. Such is life.
Hello TODers,
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/16/AR200902...
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Economy Strains Under Weight of Unsold Items
..The world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores..
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Awash in everything but long term supplies of NPK and food. Who do you think has a better chance of coming back with fresh food after trading with a farmer/gardener?
1. A person with a wheelbarrow full of I-NPK.
2. A person trying to trade a big screen tv.
Have you hugged your bag of NPK today?
Hello TODers,
Do we go down Zimbabwe style, or will we aim for a higher goal?
http://www.irinnews.org/Report.aspx?ReportId=82968
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ZIMBABWE: Bring us your dead
BULAWAYO, 17 February 2009 (IRIN) - Mass burials are being conducted in Zimbabwe's second city, Bulawayo, to empty hospital mortuaries of hundreds of unclaimed and decomposing bodies.
The morgues at the city's two main referral hospitals, Mpilo and the United Bulawayo, have fallen into disrepair, with broken refrigerators unable to maintain the required temperatures in the summer heat to prevent decomposition.
Mpilo's mortuary has a capacity of 30 corpses, but was storing 250, piled three high on gurneys, while other bodies were lying on the floor, and more arrive each day.
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As disagreeable as this job must be, IMO, it pales in comparison to the horror of those who have to unclog jammed, overflowing sewers caused by discarded fetuses and dead newborn babies.
Sadly, Ambrose Evans-Pritchard seems to think we will go down Zimbabwe style:
http://www.telegraph.co.uk/finance/4682554/Gold-hits-record-against-euro...
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Gold hits record against euro on fear of Zimbabwean-style response to bank crisis
Gold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a "Zimbabwe-style" debasement of the international monetary system.
Billionaires are stashing boxes of krugerrands under the floors of their Swiss chalets.
..Gold bugs have been emboldened by news that Russia has accumulated 90 tonnes over the last 15 months.
"We are buying gold," said Alexei Ulyukayev, deputy head of Russia's central bank. The bank is under orders from the Kremlin to raise the gold share of foreign reserves to 10pc.
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Of course, I think that WTSHTF: stashing seeds, I-NPK, starting a compost pit & garden, and having a wheelbarrow handy, are the better long-run investments since I don't see any impetus towards building my speculative 'Federal Reserve Banks of I-NPK'.
I just don't see postPeak farmers being that interested in Precious Metals. IMO, a farmer will probably trade more food for a good set of metal tools & wrenches than for a strongbox full of gold & silver.
Incarceration is good business.
"As many as 5,000 children in Pennsylvania have been found guilty, and up to 2,000 of them jailed, by two corrupt judges who received kickbacks from the builders and owners of private prison facilities that benefited. The two judges pleaded guilty in a stunning case of greed and corruption that is still unfolding. Judges Mark A. Ciavarella Jr. and Michael T. Conahan received $2.6 million in kickbacks while imprisoning children who often had no access to a lawyer. The case offers an extraordinary glimpse into the shameful private prison industry that is flourishing in the United States."
http://www.truthdig.com/report/item/20090217_kids_for_cash/
Hello TODers,
http://www.usatoday.com/news/nation/2009-02-16-haitian-deportees_N.htm
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U.S. immigration authorities say they've ordered 30,000 Haitians to leave the country.
Haitian officials, however, say they're not issuing the travel documents needed to process most deportees...But Haitian officials say the storm-batted Caribbean country needs time to recover and can't handle the return of its citizens.
A spokeswoman for U.S. Immigration and Customs Enforcement says the lack of travel documents means some deportees are spending more time in crowded detention centers. According to ICE, about 600 Haitians are being detained and more than 240 others are under a form of house arrest and being monitored with electronic ankle bracelets.
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So, the KBR workcamps & Xe [formerly known as Blackwater] must be busy. Does anyone know where these 600 are being detained?
Cynical as I am, I bet they want to get these people ashore in Haiti in time for the next Hurricane Season so that they can enjoy the full fury of the Grim Reaper's spinning buzzsaws.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?