Saturday, July 31, 2010

SAR #10212

Given the limits to perpetual growth, when do we hit the wall?

Gangbusted:  US GDP grew (?) at an annual rate of 2.4% last quarter and personal consumption expenditures (PCE) increased 1.6%.  Not bad for a bunch of people who are out of work.

Calling Dibs:  China is claiming “indisputable sovereignty” over the South China Sea, pushing back against the US attempting to exert influence over disputes in the area, which includes the worlds busiest shipping lanes.

Static:  Weekly initial unemployment claims remain in the 450,000 range for another week.  For those that don't understand the numbers, here's a chart.

Enough, Already:  BP's new leader says it is “time to scale back” cleanup efforts, before they cost him his job, too.  But he insists BP will “make things right.”

Schizoid Tendencies:  Why, when housing is in the tank and homeowners are massively unemployed and the real economy sucks, are stock markets rising?  Well, firing all those workers lowered the labor costs, which raised the profits of the big companies.  Plus most stock market activity is just robots trading among themselves.

Equal Footing:  For every dollar spent on those non-competitive renewable energy projects, the US gives $12 to big oil and coal.  Wonder how the sunshine boys would do with an extra $557 billion a year.

Two For One:  The quickest way to slow the melting of Arctic sea ice is to stop dropping soot on it.  Black soot warms quickly in the sun, even in the far north.  And the way to stop the soot is to stop burning coal, which would have the added benefit of reducing CO2 belching into the atmosphere.

Many Happy Returns:  Fannie had to refund $19 billion to those who bought Fannie's MBS that contained mortgages that failed.  Where else can you buy a bond with a money-back guarantee?

Crop Subsidies:  Iran has announced it will pay people to have babies, so the Islamic Republic of Iran can increase its population.  How do you say “cannon fodder” in Farsi?

How Big is Big?  Morgan Stanley says housing's shadow inventory exceeds 7 million and will take 4 years to clear, Capital Economics says it will be 5.5 million by the end of 2011, Barclays votes for 4.7 with a peak this summer and S&P says however many there are, they represent $480 billion in blown loans.

Eggs, Early:  Tom Price (R, GA), is so sure the GOP is going to win big this fall that he wants to do away with the “lame duck” House session after the elections in order to keep the Dems from passing any more laws.

Porn O'Graph:  Nah, energy costs don't affect the economy..

Friday, July 30, 2010

SAR #10211

What do you do once you know?

Data from the Real Economy:   While corporate profits continue to beat expectations, 24% of the unemployed have fallen into a lower social class – mainly the lowest.   The middle class is shrinking and the lower class is growing (a 16% increase in The Poor since 2008).  About 15 million are unemployed and 1 out of 3 who still have a job have had their hours reduced and/or pay cut.  It takes, on average, 35 weeks to find a new job, and there are over 5 seekers for every job opening.

Take Home Assignment:  Write an essay describing how the bounty of the sea would be affected if there were a 40% decline in the phytoplankton that form the base of the marine food chain.  Use the present tense.

Factuality:  About 60% of Pakistanis see the US as their enemy. The rest have no connection to SIS or the Army and don't go to weddings.

More of the Same: Senate Republicans have blocked a $30-billion plan to help small businesses through loans and tax cuts.  Tax cuts, they maintain, can only go to the rich. Besides, they “have cast the small-business proposal as part of what they consider government overreach by the Obama administration.”  Makes no sense to me, either.

Told You So:  NOAA has announced that more than 300 climate scientists in 48 countries agree that the Earth has been growing warmer for more than 50 years, that the trend is continuing, that the last decade was the warmest on record, and the rate of warming is increasing. Yet we fail to act.

Dumb and Dumber:  There are still a few banks out there, mostly in rural areas, that loan money to people they know and keep the loans on their books, happy to make a modest living while providing a needed service. Damned few.  The last thing anyone wants to do these days is make a long term loan on an asset that is declining in value.  A solution to this dilemma will earn you a Nobel.

Ghost Story:  The Bush White House wants to let the FBI (and other police and quasi police agencies who don't have access to NSA intercepts) access to customer records from Internet providers – without warrants and without troubling the courts.

Synonym:  After Southwest tossed a standby passenger off a plane to make two seats available for a fat flier, it politely referred to the corpulent customer as “a passenger of size.”

On Balance :  The GOP, which is in favor of redistributing wealth as long as it goes upward, claims that letting the Bush tax cuts for the rich expire would hurt the recovery because the rich would no longer lend or invest their money.  Maybe so, but that would be a more persuasive argument if they were lending or investing now.

Update:  In case you didn't know, “Muslims hate dogs and their women are forbidden to sing.”   Except for recordings to be played incessantly on Middle-Eastern buses.

Commons Sense:  Until there is an efficient, effective, and expensive penalty for casually tossing CO2 into the atmosphere and speeding global warming along, there is no incentive other than morality and good citizenship to encourage companies to cut back on their emissions. Quarterly earnings reports do not have line items for 'morality' and 'good citizenship.'

Sleazy is as Sleazy Does:  Reports claim BP is using famous faces and two front groups - America's WETLAND Foundation and Women of the Storm, to try to convince US taxpayers that they, and not those actually responsible, should pay the costs of the Gulf Coast cleanup.

Porn O'Graph:  Sales, sort of, of new houses.

Thursday, July 29, 2010

SAR #10210

Political structures exist to concentrate wealth.

Both Sides Now:   Negatives:  House prices are at 2003 levels and falling, mortgage applications are at mid-1990's levels despite interest rates at record lows, the backlog of unsold houses is at record levels, new home sales are dormant, housing starts are at pre-1960 levels, and home builders are as depressed as ever.  Positive:  Realtors say now is the time to snap up a bargain.

Nutshell:  Corporate earnings are growing strongly, yet unemployment remains near or in double digits.  That's because corporations are making money by cutting costs (for which read wages) rather than increasing sales. How long, ya' figure, can this keep keeping on?

Noise?  Durable goods orders – cars, planes, tanks – fell for the second month. Both were 'unexpected'.  Don't worry, “manufacturing is just a small part of our economy.”   Or rather, worry.

Enjoy the Weekend:   Arnold is insisting that all California state employees take three days off.   Without pay. Every month.  Enjoy the weekend, as best you can with a 15% pay cut.

Clip and Save:   There are no laws that prohibit taking pictures of public buildings.   Just don't try to explain this to a gun-toting $8.25 an hour security guard.  Know your rights, and know when not to exert them.

Nostalgia:  Longing for the secrecy of smoke-filled rooms, the Republicans today blocked consideration of a bill that would have forced campaigns to disclose the source of campaign contributions.  They didn't think they'd look good in suits with corporate logos all over them.

Water Is Wet #469:  Investor Jim Rogers has figured out that CNBC is a PR agency flacking for Wall Street.  Shazam!

In Case of Fire:  The CBO says that “unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels.”  Please walk, do not run, to the nearest exit.

Free Speech:  Anti-Islamic bus ads have begun appearing in US cities, sponsored by a group aptly named “Stop Islamization of America”.  Wonder if I can get the local transit people to carry one urging Christians to see the error of their ways.

Another Verse, Same Song:   "Our entire social and economic way of life in this country is broken and unfair and inequitable..”  Since 1979 the income of the rich is up nearly 300% while the bottom 20% have seen their pay jump by 16 cents on the dollar.  Ah, America, where the rich “are able to completely immunize themselves from the fate of the rest of the society." So far.

Cat/Bag :  Thad Allen, the government's man on the spot, says BP “put somewhere between 3 million and 5.2 million barrels of oil into the Gulf of Mexico.”   BP's own data "assume a flow rate of 53,000" barrels per day and that makes the figure is closer to 5.3 million barrels.

Uncooperation:  The microbe population in Arctic waters has not cooperated with the theory that said melting the ice and warming the water would cause them to gobble up more CO2.  The ice is melting and the waters are warming, but the microbes seem disinclined to help us get rid of our CO2.  Selfish little beasties.

Porn O'Graph:  Ups and downs.

Wednesday, July 28, 2010

SAR #10209

There is a difference between evidence and proof.

The Nature of the Beast:   Homebuilders, stuck with about 1.2 million building-ready development sites, are continuing to build houses – even in places like Las Vegas - even though they have no hope of selling them, especially at a profit. It's what they do.

Quis custodiet ipsos custodes?  A Federal Judge said he wasn't going to “second-guess the CIA Director regarding the appropriateness of any particular intelligence source or method,” even if they are explicitly illegal under US law.  What part of 'secret' do you have a problem with?

Fine Distinction:  The Special Inspector General for Iraq Reconstruction says the US Department of Defense is unable to account properly for 96% of the money.   DOD says the money isn't missing, they just don't know what they spent it on.

Disconnect:  Business is booming, corporate earnings continue strong, while in the worker's world wages continue to stagnate, real unemployment continues to hover in the high teens, and resentment continues to grow. How long can this chasm continue to grow?

Fall Campaign:  The neocon Neanderthals that suckered us into Iraq are gearing up for a big push to lie us into Iran this fall. Forewarned is forearmed.

Water Is Wet #467:   Nassim Taleb says the problem with debt based economies is that they need more and more debt just to stay even, and even more debt to make any progress – and sooner or later you run out of suckers.  It's later than you think.

Silly Question:  Will Republicans Really Block Tax Cuts Because They Go Only to Earners Below $250K?

Doomer Porn:  If you like to be depressed, have at it - “America’s collapse occurred when government ceased to represent the people and became the instrument of a private oligarchy.”  Which isn't quite right because the government was captured some time ago but the collapse is just beginning.

Spot Quiz:  Raise your hand if you think big Wall Street banks do not make a profit laundering the profits from the drug trade.

Veiled Truth:  Before we get all excited and ban veils along with mosques and people who don't look like us and those who want to be roofers and take care of our children, it might be worthwhile to get a bit of perspective.  Nah, that's unAmerican and not worth the trouble.

Neither/Nor:  Saying that the horror stories from victims of shale-gas fracking are fictions and that they are not responsible even if they did happen, industry leaders maintain that regulation would kill jobs, stifle gas production and cut their profits.  Especially cut their profits.

Assigned Reading:  “The issue is death — death gushing at ten thousand pounds per square inch from a mile below the sea, tens of thousands of barrels of death a day.  Not just death to eleven human beings.  Death to sea birds, sea turtles, dolphins, fish, oyster beds, shrimp, beaches; death to the fishing industry, tourism, jobs; and death to a way of life based on the beauty and bounty of the Gulf...”  Go read the rest.

Numbers Game:  In the US, the top 1% own 83% of all stocks, from 2001 – 2007 over 65% of all income growth went to the top 1%, at least 60% of Americans “usually or always” live from paycheck to paycheck.  Cambodian garment workers make 22 cents an hour.

On Balance:  The business press is embracing Richard Koo's view that The Current Mess is “a balance sheet recession” caused by businesses paying down their debt rather than investing in production.  He cautions that the need now is for further government stimulus, not an austerity program to tame government debt.  It would have been quicker if he'd just said he was a Krugmanite.

Porn O'Graph:  Peter, meet Paul.

Tuesday, July 27, 2010

SAR #10208

Our decision makers think they are doing the right thing.

One From Column A:   The business booster press is heralding  “ New Home Sales Surge.”   But hidden in the data is this: they surged ony because the previous month's sales were the lowest on record – and had been revised down sharply.  June's were the second lowest on record and the average new home price slid another 1.4%, so let's keep the noise down until we see how low it goes upon revision.  Maybe we should just kiss the American Dream goodbye.

One Born Every Minute: You know you are being suckered when someone railing about ending the Bush give-aways for the rich calls the federal inheritance tax “the death tax” and then misstates its parameters.

Trick Question:  Which is the bigger threat:  Terrorism or Wall Street Bonuses?

A Dollar Saved: As cities run short on funds, some are telling their EMT/Paramedics to use “workarounds” and “alternate protocols” to replace expensive medications the cities can no longer afford.  Here, bite on this bullet.

Heresy:  In the bad old days – when I was young – there were no credit cards.  You couldn’t spend money you didn’t have just to buy things you wanted but couldn’t afford.  Then the miracle of credit card debt enslavement came along and it became easy to spend several years income before you earned it.  Looking back, maybe if governments couldn’t finance deficits by issuing debt, life would be a bit harder, but not nearly as hard as it's going to be.

Nutshell:   “The Federal Reserve provided most of the money for new mortgages in the United States last year, effectively lending more than $1 trillion to American homeowners.”   Their next big trick will be getting rid of all that bad paper.

State of Play:  GM, although bankrupt and a ward of the US Treasury, is using a few billion in cash to buy up an outfit that specializes in loans to the credit-unworthy.  This one stinks so much that Fitch says it cannot even say if it is a plus or minus.  Hard to tell which is more pathetic, an auto maker who has to sell its cars to people who cannot afford them, or a rating agency that's afraid to rate the transaction.

Rhetorical Question: Is the CIA beyond redemption?

More Hogwash:  According to the Employment Policies Institute, over 100,000 teenagers are unemployed this summer due to the increase of the minimum wage to $7.25.  The bad economy had nothing to do with it.  Oh, yeah, EPI is a front group for sponsored by the restaurant and hotel industries.

Here's The Plan:  Republicans know that fiscal disaster is inevitable - especially if they were to return to power and continue their program of tax cuts for the rich under the bankrupt but attractive myth of supply-side economics.  So they have no interest nor incentive to do anything remotely useful.  The Democrats should realize this, stop trying to curry GOP favor, and rule without expecting any cooperation.  But it ain't gonna happen.

Theology:  According to the book of Jobs, God's name is  i”...

Whistling Past the Cemetary:  Little Timmy thinks that private investors can, should and will take over stimulus duties from the government – which may or may not be a prelude to some sort of tax-break legislation or just a call to patriotic duty.  But capitalists make investments when they see a chance for profits and a world full of overcapacity and negligible demand does not seem encouraging.

Factoid:  U.S. cities and states may need more than $1 trillion of federal assistance in the next three years to stave off financial failure.  That's after they lay off the firemen and stop collecting the garbage..

Parse This One:  “The Federal Deposit Insurance Corp. plans to issue securities backed by about $500 million of home mortgages acquired from failed banks.”  Wanna buy a cow that gives no milk, a race car without an engine?

Porn O'Graph:  The Dead Seas.

Monday, July 26, 2010

SAR #10207

Economics attempts to mathematically model desire.

Echo? What Echo?  Scientists and other investigators are beginning to question the evidence “proving” that North Korea was responsible for sinking the South Korean naval vessel.  Can you say 'Turner Joy'?  On the other hand, is it possible that one day North Korea will make the step from saying silly things to doing incredibly stupid things?

Extra Credit Question:  Who Ultimately Pays the Corporate Income Tax?  A: The same guy that ultimately pays all taxes, the consumer.

Jobs is Jobs:  An American Petroleum Institute report claims that producing natural gas from the Marcellus shale region could create as many as 280,000 jobs, many of them presumably involved in repairing the ecological damage done by the drilling, perhaps many others in related healthcare jobs.

Parse This:  Newt Gingrich explains that his calling Shirley Sherrod “viciously racist” “is one more example of the Obama administration's continuing incompetence.”

The Dead Budgie:  In failing to take meaningful action now to avert catastrophic climate change, our politicians doom us to a disaster of our own making.  It is not just a failure of the Democratic leadership, not simply another Presidential failure, it is a failure for each of us, for our children and our grandchildren.  It is a victory of today over all our tomorrows.

Fifty/Fifty:  The US government, facing a $1.47 trillion deficit, is borrowing 41 cents of every dollar it spends. This does not end well.

Good Idea:  Economist Robert Solow, Professor Emeritus, MIT thinks the time has come for “Building a Science of Economics for the Real World”. Why didn't Krugman or one of those guys from Chicago think of that?

Economic Theroy:  Testing economists' belief that if you spend more money you can produce more resources, Mexico is urging foreign and private oil companies to spend money to find more oil as its production drops 2% in a month and cash-earning exports drop 4%.

Small Blue Planet Seeks Same:  A NASA space probe has found “at least” 140 planets similar to Earth.  Each was created in only seven days.

Puzzle:  Why do conservatives dismiss those, like Keynes, who have been right about the economy and insist we follow the sack-cloth and ashes philosophy of those, like those advising Hoover and Friedman’s Chicago School, who have been repeatedly wrong?

And Your Point Is?  “The public would happily accept higher levels of the neuro-poison for several more years in exchange for lower power bills next year.”

US and Them:  In contrast to our hand-wringing over BP's desecration in the Gulf of Mexico, the US pretty well ignored the Bhopal disaster and has remained resolutely ignorant of the 10 million barrels of oil splashed around the Nigerian delta in our names.  And we've offered neither cleanup nor compensation to the citizens who suffered for our sins.

Porn O'Graph:  Down so long, looks like up...

Saturday, July 24, 2010

SAR #10205

Whatever theory they're using isn't working.

Deconstruction:  Fannie and Freddie are a bad idea that didn't – couldn't – work.   They're going to cost the taxpayers a half-trillion dollars as they flounder into failure.  But no one knows what comes next. They are the entire US housing market.  They don't work, but US housing doesn't work without them.  Your move.

Oil on Troubled Waters:  American academics are shocked to learn that BP is buying up scientific experts ahead of years of lawsuits.  Research into freeze-dried water continues.

Missing Data:  How can economists model the economy if they do not consider the limits placed on economic systems by declining energy resources?  If the economy runs on oil and oil is running out, don't you think there's going to be some deleterious effects along the way?  But no, their answer is that higher prices for oil will make more oil appear. Shazam!

Healthy Insurers:  Blue Cross/Blue Shield insurers are sitting on piles of cash more than three times the amount they need – yet they keep raising our rates 20% a year.

Freedom From Information:  The Australian government redacted 90% of a document outlining its plan to monitor citizens' use of the internet, claiming they did so to “prevent premature unnecessary debate.”  As opposed to timely unnecessary debate.

On the Border:  Venezuela, acting “out of dignity” has broken off diplomatic relations with Colombia.  Why do I suspect the US is involved in this in some way?

Smoke and Mirrors:  Just as pension management used to pretend solvency by “assuming” 20 consecutive years of whatever rate of return was necessary to keep up the charade, banks are now making useful adjustments to their anticipated loss rates.  Neither approach should be confused with events in the real world.

Nothing Left to Lose:  “We don’t know how well the plan would actually work — but there’s no harm in trying...” Paul Krugman.

Go Away!  Population growth is the biggest problem facing us.  The resources do not exist to raise the current poor to a decent level of existence and we're adding 220,000 a day.  The only way the earth can support mankind is for there to be a lot fewer of us.  If we can't feed 11 billion, there won't be 11 billion very long.

More Non-Evidence:  Everywhere the US Army goes it sprays depleted uranium projectiles.  Later on when the birth deformities and cancer rates skyrocket, there's never any connection. Fallujah is just the latest iteration, where the people of Fallujah are experiencing higher rates of cancer, leukemia, infant mortality, and sexual mutations than those recorded among survivors in Hiroshima and Nagasaki.

Over There:  Chinese banks will be lucky to get back 27% of the $1.1 trillion they've lent to local governments for infrastructure projects. What's 'bailout' in Mandarin?

In Outline:  Atmospheric CO2, after being stable for several hundred thousand years, began rising with the Industrial Revolution, has now increased by 40%, and is still rising.  Temperature, too, follows the same trend. (Increasing CO2 leads to increased temperature.)  Long term factors cannot explain short term effects.  The penalties for continuing 'business as usual' are immense, nearly infinite.  Vested interest in the carbon economy are short-sighted, self-centered, and well-funded.  And greedy, very, very greedy.

Asked & Answered:  Were the HAMP mortgage modifications worth all the hype, did they accomplish anything?   Nope.

Porn O'Graph:  Fever, we give us fever.

Friday, July 23, 2010

SAR #10204

Consensus usually indicates a serious mistake.

Lesson, What Lesson?  GM – 61% owned by We the People - is buying AmeriCredit for $3.5 billion in order to give un-creditworthy customers a chance to end up in hock to them.  It's part of their plan to expand their market by 'qualifying' buyers who haven't the resources to buy a car.  Sound familiar? GM once owned GMAC which owned DiTech which was a giant in the sub-prime mortgage business.  GMAC – through it's subsidiary Ally Financial – is into Uncle Sam for over $50 billion.  How much do you think we'll lose on this new deal?

House Address:  Sales of existing houses fell only 5.1% in June, y/y, mostly because of the lingering effects of the buy-a-house bribery. Available inventory was up 4.7% y/y at nearly 9 million houses.  Median prices were up 1% y/y.

Forward, No?  The future will resemble the present, only more so, right? Nope.

Myth:  “Investors make estimates about all the potential profits down the road of a particular company, and price the potential growth or decline in a stock accordingly.”  Maybe once upon a time, but today there are no investors, only speculators, gamblers.  A stock is priced solely on the bigger fool theory, grounded in the delusional belief that the days of cheap credit continues.  It does not; half the credit available in 2007 has disappeared and with it all hope for our credit-based economy.

Facts Not In Evidence:  The shared delusion that China is “stuck with US treasuries” and must continue to support US fiscal foolishness ignores China's slow, stealthy but certain shift to strategic commodities, industries, and assured access to primary resources.  While we may be able to fool ourselves, fooling the Chinese takes more subtlety.

We Have A Winner:  The 'flation battle is over. Deflation has won on points.

Social Security's Bottom Line:  One out of three Americans has no retirement savings.  Fully half of all Americans have less than $2,000 set aside for retirement.  Tell me again about doing away with Social Security or cutting the funding levels.

Smoke, No Fire:  Unemployment claims are stuck at 460,000 again this week.  Seasonally adjusted insured unemployment remains at the 4.5 million level.  Congress finally got around to extending the unemployment benefits for the long-term jobless.

The Odds:  When they tell you about the miracle of shale gas, remember that the “100 year supply” is what's possible – as in having a 10% chance of happening.  The supply that's at least 50/50 probable only adds up to a 25 year supply.  Salvation ain't what it used to be.

Inertia:  We've already put enough CO2 in the atmosphere to guarantee a 3 foot rise in sea level by mid-century – even if we completely stopped emitting carbon dioxide today.  But it wouldn't stop there, for in the half-century after that the effects of the carbon we've already put into the skies will keep on warming the earth and melting the ice and heating the seas, so the rise will be 6 to 9 feet by 2100.  And more after that.  But we are not going to stop, today or any day soon, so these are modest estimates.  The gift that goes on giving.  For centuries.

Oops...  Governor Jindal, in an attempt to save Louisianan's oyster beds, had giant valves on the Mississippi opened to flush BP's oil back out to sea. Worked to some degree, but they forgot that oysters don't tolerate fresh water – the full impact of the oyster die-offs will last for years, far longer than the damage from the oil would have.

Porn O'Graph:  Lost and Found.

Thursday, July 22, 2010

SAR #10203

Economic systems are belief systems.

Words As Deeds:  “Investors can bring private rights of action against ratings agencies for a knowing or reckless failure to conduct a reasonable investigation of the facts...”  Now all three ratings agencies are saying  “Don't quote me!”  Apparently investment ratings are now to be used only for amusement purposes, as though this were a change.

Suffer Now, Suffer Later:  Deficit hawks keep worrying about the sky falling – some time in the future. Krugman & Company says 'Maybe so,” but would rather keep the circus going as long as possible.  Now comes L. Randall Wray with a calm and rational explanation of why Vinnie will be happy to keep getting the vig while we go about getting the mess straightened out.  It's moot anyway, because without additional stimulus the goose is well and truly cooked.

Measuring Rod:  In signing the industry-written so-called finance reform law, Obama called it “the strongest consumer financial protections in history."  Which tells you how little protection the consumer had before. Now everyone's bragging about financial reform, financial reform.  Look, the current problem is the result of massive fraud, ponzi schemes, and outright lies.  How are they going to reform?  Tell smaller lies?  Steal smaller amounts less often?

Silly Season:  After a knee-jerk reaction to an obscure right wing blogsite's mischaracterization of Ms. Sherrod's comments, the White House is now trying to get the egg off its face.  The only one that comes out looking good from all this is Ms. Sherrod.  Not Obama, not the MSM which treated it as a serious story, nor Mr. Breitbart who started the whole thing with enthusiastic misrepresentation.  You'd have thought he was auditioning for Fox or something.

Lies, Damned Lies & (GOP) Statistics:  “The last year of the Bush administration, the deficit as a percentage of gross domestic product was 3.2 percent...”  Excuse me, but I was there and that's not the way it happened.

Waffles:  Oil is leaking from the seabed around and near the BP disaster, but (a) it may be coming from an abandoned well nearby, (b) the five leaks around the BP disaster itself don't mean anything, (c) we don't know but we're pretty sure there's nothing to worry about.  Certainly the BP disaster well isn't buckling or anything.  There, feel better?

Be Prepared:  If you are working on your survivalist Merit Badge, check out the  'How To'  list that Michael Panzner posted.

Cost/Benefit Ratio:  The “War on Terrorism” has cost the US well over a trillion dollars (including the useless war in Iraq and the endless one in Afghanistan) and several Constitutional rights.  The bailout of Wall street has cost us over $3.7 trillion, to no discernible benefit to those who don't draw banker's bonuses.  I've got a bad case of buyer's remorse.

Socialist Menace:  Finland, not satisfied with spoiling their population through socialized medicine, now insists that access to high-speed broadband is a 'legal right'.  If we can't invade them, how about lobbing a couple of Predators at the smarmy bastards?

Volunteers:  European countries are asking their citizens to (quietly and obediently, if not happily) embrace major national sacrifices (for which read personal suffering) in order to save bankers from 20 years of reckless lending prevent a disastrous future. Worked well in  Hungary right? And Greece will go along quietly, too?

Stumble, Or Tripped?  Hand-wringing anew as most areas show ever-increasing housing inventories as sales plummet, foreclosures increase, and prices fall.  The WSJ says the problem is “too many homes and falling demand.”  The problem is we built far too many houses on the ridiculous idea that everyone should own one – or at least be paying on one.

Porn O'Graph:  Grease for the wheels, warfare as welfare.

* * * * *

Lifeline:  Stoneleigh has updated the Automatic Earth's Primer.  The nicest thing you can do for yourself this very moment is to go and bookmark the entry (or copy and paste where it is convenient, like your Desktop), then treat her reference essays as reality therapy, taken as needed.

Thursday, July 15, 2010

SAR 10194

Greetings Strangers!

Am adventuring in the (mainly) childless reaches of Northern Portugal - tomorrow and the weekend will be spent in the Duro valley, drinking Port.

We return to (fat) civilization Monday next and I will try to be acerbicly present by Tuesday or Wednesday - after some needed but minor medical/dental attention.

Thanks for the emails - even those that have so far gone unanswered. Have been very busy and not had much time to do much other than read Automatic Earth, Naked Capitalism and a bit of Bloomberg.

See you soon.


Friday, July 9, 2010

SAR #10189

We need to re-establish the classical balance between investment and abstinence.

Oilier than Thou: This year the oil companies will pump about $15 billion worth of oil out of federal territory this year and will pay no royalties to the government. BP gets to write off 70% of the rental fee for the Deepwater Horizon rig (which was registered in the Marshall Islands, in order to duck most US taxes) – just one of many tax breaks we give Big Oil. Maybe if we took away the tax breaks and insisted on royalty payments, the oil companies might be a tad more careful with the stuff.

Back Home: If the economy seems bad now, just wait until the states start to get serious about closing their $125+ billion budget gap and start by laying off a million or so of those do-nothing state employees. Won't miss 'em, will we?

About Indexing: In inflation-adjusted dollars, today's gasoline taxes are half of what we paid in 1975. In that gasoline taxes go to building and maintaining roads, happy motoring!

Size Matters: The rapid growth of CO2 emissions in China and India last year completely nullified all of the CO2 reductions made by the developed world – which were pretty puny to start with.

Move Along: Increasing numbers of Americans are being put under surveillance or harassed – and even arrested – “for doing little more than peacefully exercising their First Amendment rights.” This virus has spread to at least 33 states, as the police and authorities try to protect the citizenry from citizenship.

Correction: The question was "How will plants get by when pollinators vanish?” The 'how' does not belong in the discussion.

Porn O'Graph: Nah, energy prices couldn't cause recessions....

Wednesday, July 7, 2010

SAR 10187

Some lose, some must pay - the circle closes.

We continue our tour of faded empires, adding Portugal to the list which now runs to Istanbul, Vienna, Berlin, Venice, London, Florence, and Rome. Snippets only for a couple of weeks, as we try to avoid the present while touring the past.

Tuesday, July 6, 2010

Gone Fissing

Your humble servant is on vacaton and is being seriously humbled by internet service in the wilds of Portugal. Try to stay warm until I get back. ckm

Monday, July 5, 2010

SAR #10185

"There is no flag large enough to cover the shame of killing innocent people for a purpose which is unattainable."

Howard Zinn

Fool Me Once... Again:  News reports suggest Obama is willing to postpone EPA regulation of the country's top polluters in an attempt to get Republicans to let the Dems pass a useless but shiny new energy bill.  Slow learner, isn't he.

Interpretation:  The Coast Guard says no one – especially reporters – can come within 65 feet of any “oil spill response operation” for safety reasons, on pain of a $40,000 fine and/or up to five years in jail.  Whose job safety they were protecting was not specified.

Depends on the Paperwork:  Joe Lieberman (Idiot-CT) says the best way to raise morale among the troops in Afghanistan is to let them kill more civilians.  As I recall this was tried in Vietnam, where the dead were all enemy cadre.

Pop Quiz:  Which has done more harm, religion, nationalism, or religious nationalism?  God Bless America.

Conundrae:  If all the countries running big deficits are going to solve their problems by exporting more, who's going to do all the buying?  If every country (and company and city) needs to sell ever more debt in order to keep the doors open, isn't there an absolute limit to how many possible buyers there are with extra cash sitting around, no mater how high the interest rate?

Reminder:  Independence Day celebrates our fight to cast off rule by a wealthy elite who were keeping the benefits of our labors for themselves and taxing us for the benefit of their companies.   More or less.

Savings Account:  Saudi Arabia's King Abdullah has ordered that oil exploration in the kingdom stop and that the oil yet unfound is to be left in the ground as an inheritance for future generations.  That there have been no significant new finds in a generation or more and that stumbling on significant new reserves is most unlikely was not mentioned.  Now when they start running out of oil, the Saudi's can just say they're saving it for the kids.  Beats saying that the largest oilfields in the history of the earth are running dry....

Celebrating the Fourth:  A federal court has told the administration that if the thugs at Guantanamo couldn't force a confession out of an Algerian detainee in 8 years, they should let what's left of him go.

Ill in Illinois:  Illinois has no idea where 1 out of every 4 budget dollars is going to come from this year.  Over $5 billion in the hole, the state is behind in payments to public schools, the state university, child care centers and rehabilitation providers.  The prison system is 50% underfunded.  Can't wait to see how they solve that one – probably have to let a former governor or two out early.

Takes One to Know One:  John McCain says that GOP Chairman Steele's calling the disaster in Afghanistan 'Obama's War” was “Wildly inaccurate.” And John knows a thing or two about wildly inaccurate statements.

Hearts and Mines:  Here's how the hearts and minds thing is going: After we leveled Falluja (twice), the city needed everything – roads, water, electricity, hospitals, schools.  So we decided to build a sewage system.  Six years and $104 million later, we are leaving and the sewer system is still unfinished and unworkable.  Much like the rest of our efforts there, it's down the toilet.

Location, Location, Location:  Wyoming wants to sell a 1,366 acre parcel of prime vacation land, $125 million, as is, with moose, elk, wolves, grizzlies, and tourists who think they're visiting Grand Teton National Park.

Porn O'Graph:  From unemployed to unemployable to forgotten.

Saturday, July 3, 2010

SAR #10184/Weekender

What will we do we can no longer stuff our emptiness with things?

Bunch'a Numbers:  The US lost 125,000 jobs in June, which is pretty shabby in that we needed over 800,000 new jobs just to maintain the status quo.  Unemployment fell to 9.5% only because over 600,000 were thrown off long term unemployment and no longer exist in the government's eyes.  Those that had jobs earned a tad less and worked a few minutes less, too.

Raw Data:  After a nice little run-up over the last few weeks, the price of a barrel of oil has fallen as the recovery stalls.  Or is it that the recovery stalled after a run-up in the price of oil?

Hostile Environment:  Most Pakistanis admit that Islamist extremists were most likely directly responsible for the Sufi shrine bombing that killed 42 worshipers.  But, they say, it was America's war in Afghanistan, its missile strikes in Pakistan's tribal regions, and its alliance with Islamabad that forced them to their suicide missions.  Tell me again about our progress.

Gift that keeps on taking:  In the name of the people, the GOP, having killed extended benefits for the unemployed, now wants to raise the retirement age for Social Security to 70, arguing that the deficit is endangering the banks the economy.  Suffering is good for you and these steps are necessary to fight the deficit. Right now the bond market doesn’t seem worried about US solvency, with 10 year treasury's below 3%, but it's always good (GOP) policy for the lower classes to suffer.

Smoke and Mirrors:  Fannie Mae is bragging that the rate of serious delinquencies among its portfolio has decreased 3% from March to April. They more quietly noted that delinquencies of 90 days or more were up 50% from a year earlier.  Fannie is stepping up the pace of foreclosures, so maybe the 3% decrease is just those they've finally shoved out the door.

Bumps in the Road:  Based on an estimate from Autodata Corp, light vehicle sales were at a 11.08 million SAAR in June.  That is up 14% from June 2009 (when sales were very low), and down 4.6% from the May sales rate.

Searching for the cure:  Iceland's rebirth suggests that it's best to take your medicine, let the too big fail, and get on with rebuilding.

The Terminator: Arnold says about 200,000 of California's state employees will be paid only minimum wage ($7.25 an hour) next month because the state hasn't got the money to pay them properly.  Controller John Chiang says that unless a court orders him otherwise, he intends to pay people what they are owed, even if he has to write bad checks to do so.

Better Late Than...   Apple now admits that its iPhones – all of them, not just the iPhone4 – have been displaying inaccurately high signal strength since the first one was introduced in 2007.  They also said they had just now discovered this error.  Can you hear me now?

Good Question:  Given the humongous oil spill currently at center stage, now might be a good time to think about the role of profit in the capitalistic decision-making process, about delivering risk to the community while reserving profits to the shareholders, about the encouragement of management to put the public and the company at risk in order to increase their personal rewards.  Then again, maybe there will never be a good time to discuss these issues in public – outside the occasional hour in some renegade church that still remembers Christ's teachings.

Castor Oil:  Just so you understand what they mean when they say 'austerity', there's this:  In Great Britain, over 1.3 million will be made redundant, on their way to join the Irish with 15% unemployment as their governments adopt “feed a banker' policies.  Next we’ll hear that the Irish just aren’t doing enough, and must do more.  If bleeding the patient hasn't cured the problem, then more bleeding is obviously the answer.

Financial Diet:  The much ballyhooed financial reform act gives banks until 2022 to reform. That's about when I'm going to start my diet, too.

Friday, July 2, 2010

SAR #10183

Whoever said "image is everything” worked for BP.

Interpretation, Please:  Obama says the troops in Afghanistan could use a “civilian expeditionary force” to help win the hearts and minds of the populace.  Could call it A-CORDS after its 1960's SE Asian predecessor.

On Average:  One-third of all houses sold in 1Q2010 were foreclosure sales.  More than 300,000 houses a month go into foreclosure.  Houses sold out of some stage of foreclosure bring 30% less than similar non-foreclosed properties.

Hair Splitting:  Economists (and bloggers) are debating whether the second half of the year will bring an economic double-dip or or just a slowdown in the rumored recovery.  Either way, the unemployment rate will increase and wages will fall, so the nomenclature is moot.

Decisions, Decisions:  The questions about air travel keep rising.  No, not 'is it safe?'   But along with the old 'aisle or window' and the newer 'Do you intend to bring any luggage?' now comes 'sitting or standing?' and 'do you want to buy a coupon for the toilet?'

You swear you've heard it before... “Earth’s population is approaching seven billion at the same time that resource limits and environmental degradation are becoming more apparent every day. Resource scarcities, especially oil, are likely to limit future economic growth …  “Just An Old Fashioned Love Song.

Water Is Wet:  238 presidential scholars have decided George W. Bush was the worst president in modern history, period.   And:  The stock market is an “obviously corrupt” fraud.  Soon they'll tell us about the oil in Iraq.

98 Pound Weakling:  We made fun of Jimmy Carter when he sat down at the piano and played the opening bars of Alternative Energy...  We should'a listened closer.

Question of the Day:  How can we pretend to get ready for any version of the likely future – absent petroleum, in the face of global warming – when most people tune out at the slightest suggestion that there might be trouble ahead?

Sunshine: Louisiana's Gov. Bobby Jindal has decided that all the records from his office related to the oil spill and his dealings with BP must be kept secret to protect the guilty.

Object Lesson:  TransCanada announced that its Keystone pipeline has begun delivering crude oil from Alberta's oil sands to the US Midwest.  The $5 billion project took two years to complete and will deliver 400,000 barrels a day.  Five billion dollars.  Two years of construction.  To deliver 2% of the US demand for oil.  How much is that in solar panels?  Windmills?

Bizarre:  I don't know which is stranger, that Tony Blair would be awarded the 2010 Liberty Medal or that he beat out George W.

Surprise!   The lawyer managing BP's $20 billion disaster fund has acknowledged that not all claims will be paid, specifically those from folks who want compensation for the damage the oil on the beaches does to the value of their homes, “because there is not enough money in the world” to pay all claims.  And thus it begins.

Foreplay:  While one of the relief wells being drilled alongside the leaking BP hole is within 15 feet alongside and just 1,100 feet from the target depth, penetration will not be achieved until August.  The closer the drill gets, the more delicate the dance, as engineers feel their way.

Thursday, July 1, 2010

SAR #10182

They owe us our way of life!

Slow Learners:  The House of Representatives has endorsed a resumption of the home-buyer tax bribe.  The Senate, too, will pass it soon. Why is it that only the bad ones get bipartisan support?

Jobs Up!  ADP estimates that non-farm private employment increased 13,000 from May to June.  That brings the total increase over the last five months to 34,000.  Don't get too excited, there are still way over 10 million more folks looking for one of those 34,000 jobs.

Remember: Always Low Prices.

Just Sayin'   CNN reports that the vast majority of those who worked to clean up the 1989 Exxon Valdez oil spill in Alaska are now dead, and that the life expectancy for those who worked to clean up the Exxon Valdez oil spill is about 51 years.  Safety gear? BP don't issue no safety gear.  Tie a hanky over your nose and quit worrying about that dispersant stuff.

Essay Question:  Did 9/11 justify the war in Afghanistan?  Extra Credit: If not, explain why it happened and continues to happen.  Specific identities of those benefiting the most earn extra points.

Fiscal responsibility:  The most impressive facet of today's financial landscape is how much of their bad debts the financial sector was able to quickly transform into government debt to be paid through austerity measures imposed on the taxpayers.   After bailing out the banks, governments are destitute and will try to force the public to live on bread and water so the treasury can continue to feed the wealthy.  When you hear a deficit hawk warning of the dangers at some far future date, remember this is class warfare and your class is not the one that's winning.   And that the danger is now.

Back At the Ranch: In case you were beginning to believe BP's propaganda, note that the Department of the Interior just fined BP $5.2 million for lying.

Bullshit Alert:  Someone named Megan McArdle has an article at The Atlantic which insists “Austerity In America Will Be Painful, But It Will Be WAY Better Than Having A National Debt Crisis” as if those were the only choices available.

Lying Ears: Apple says the iPhone4 “is the best we have ever shipped”, that antenna problems “are a fact of life” and that your phone does not need repair, you are just “holding it wrong.”  And millions of blindly loyal Appleites will nod their heads and twist their arms up and about and disregard the evidence right being whispered in their ears.

ABC, 1-2-3, Do Rae Me:  Meredith Whitney sees house prices falling another 10% by the end of the year, which will hurt bank earnings (because the banks are running out of places to hide their losses) and lead to a decline in the economy as consumer spending dwindles.  For the want of a nail...

A Quiet Disaster:   BP owns a multi-billion dollar oil platform called Thunder Horse. It was designed to pump 250,000 bpd.  Production began in 2008 and by January 2009 it was producing 170,000 bpd.  Production has fallen steadily since then and now only 70,000 bpd dribbles out – about as much as is spilling out of BP's other disaster.  Maybe, just maybe, drilling deep holes in deep water isn't such a sure thing.

Ducking Death:   Alberta's Energy Minister says that the death of 1,600 ducks in Syncrude's toxic ponds has been "overpublicized".  A discrete note in the obituaries saying  “after a brief illness…” - would have been sufficient.

Daily Downer:   The Economist sees a future of stagnation, default or inflation, Or first one and then the others in that order.  “The only way out is growth” but when it becomes clear we are approaching the 'Limits of Growth' all hell will break loose, as a few billion people start going through the grieving process.  If the only way out is growth, there is no way out.