Saturday, August 9, 2008

SAR #8222

While it says "In God We Trust" on our money,
our actual motto is "What's in It for Me?

GIGO: Government data In, Garbage Out - at least with oil statistics. Energy Information Agency monthly estimates of worldwide crude oil production have been, on average going back to 2006, revised downward by 300,000 barrels from the original estimates.

Pot, Kettle: JPMorgan sees Ambac as "a company with a broken business model saddled with substantial liabilities and negative tangible equity." Their analysis goes on to suggest the accounting method Ambac uses "distorts true economics."

Light My Fire Bulb: In all the hoo-hah about alternative energy, we overlook the fact that alternative energy sources are expected to make up only 7% of US energy supply by 2020. Natural gas and coal will deliver almost all the electricity; and with it, ever more carbon dioxide into the ever warmer atmosphere.

Obituary: Fannie Mae will stop buying or guaranteeing Alt-A home loans by the end of the year, which pretty effectively is a death knell for Alt-A as a 'mortgage product'.

Over Eager : A report from London's Chatham House suggests the obituary for high-priced oil is more than a tad premature, and suggests a severe supply crisis will occur within the next five years.

The Real Elephant In The Room: We continue to embrace the Chamber of Commerce 'Growth is good' approach to economics, even though each of us knows that perpetual growth, perpetual increases in consumption, simply are not possible in a closed system, and that the Earth is a closed system. Couple the faulty premise of perpetual growth with human greed...

Good Intentions: The 'HomeSaver Advance' loan program - Fannie Mae's initial attempt to save the housing market by giving delinquent homeowners unsecured loans to bring them current on their mortgages - has not been a Big Success. Five months after the program started, over 40% of the people it 'helped' are once again delinquent. A well-paved road.

Planning Ahead: Yes, the price of a barrel of oil is dropping. Even so, do you now wish that you had bought a large SUV and large suburban McMansion - all with 100% financing - back in January 2006? Are you going to run out an buy a new $250,000 house today?

Gone Fishing: Monoline insurer ACA called it quits, gave what was left of the company to its creditors and terminated $65 billion in CDS contracts. It is thought that this will set the pattern for the demise of the other monoline insurers.

Pink Slip: Citing 'budget cuts' and not mentioning Glantz's views on the causes and cures of global warming , the National Center for Atmospheric Research has closed its climate impact center and terminated Michel Glantz, one of the world's foremost authorities on the societal impacts of global warming. .

Porn O'Graph: Unemployment claims continue rise.


Anonymous said...

I hate to take you to task about this as I love reading this blog every morning but the earth is not a closed system. Sunlight comes in, small molecules like hydrogen or helium leave. Not to mention anything else that makes its way onto our planet or that we send into space..

This being said, the growth is good policy doesn't recognize the upper boundary limitation of available goods.

It's just like bacteria growing in continuous culture, eventually growth will be constrained by limitation of available nutrients, but it won't stop.

Chiao said...

Also regarding the closed system comment - what about the GDP of virtual worlds like Second Life? The wealth created there is real and non-pollutive. There would be a considerable lifting of the upper bound if the economy grew in that direction.