Monday, January 9, 2012

SAR #12009

Science doesn't care whether you believe.

Coming Attractions: American, British, Israeli and Iranian warships are reported to be steaming towards the same stretch of water near the Straits of Hormuz. What could possibly go wrong?

Grimm Tales: Spain's unemployment is fast approaching 1 out of 4, Europe as a whole has over 10% unemployed. Italy is paying well over 7% on its bonds. German industrial production dropped 8% while retail sales on the continent sputtered and fell sharply in Germany. Belgium, Malta and Cyprus all face fines from the EU for not being able to control their debt (thus they have more money taken away from them... Good Idea.) France is rushing to impose a form of Tobin transaction tax. And the technocrats in Brussels want a new pact that will allow them to spank countries that break the rules.

Freedom to Suppress: Speaker John Boenher's office, which controls the use of TV camera in the chamber, has once again refused to let C-SPAN broadcast the charade that is supposedly the House in Session (but only 'pro forma' to prevent Obama from getting on with the business of governing) when only two or three Republicans are present and Democrats are not permitted to speak.

Book Talk: UBS warns that the Greek sovereign debt crisis "will deteriorate further than the stressed levels of late November. We do not believe that Greek PSI will take place in a “voluntary” fashion but instead expect coercive restructuring of Greek debt... triggering CDS contracts. Is this an honest prediction or just UBS looking for someone, anyone to bail out the banks? And Greece is just the beginning. The holding company that controls Portugal's second largest retailer has moved to Holland due to worry that Portugal will leave the euro.

Bypass Operations: Global trade is still done in the world's reserve currency, the US dollar. Except for certain trade between China and Japan, China and Iran, India and Japan, China and Russia, Russia and Iran.

Take Two Aspirin: In the US there were shortages of 267 prescription drugs during 2011, a 20% increase from 2010. At least 15 deaths were attributed to the the shortages, which have set successively higher records in each of the last 5 years, up from 58 in 2004. The FDA also said it had prevented more than 100 other shortages during the year. Some shortages were due to plants shut due to contamination or quality problems, some were orphaned when manufactures closed product lines due to a lack of profitability.

Prophets and Losses: SocGen says that a full-blown EU embargo of Iranian oil would push Brent crude into the $125 - $140 a barrel range, and that a shutdown of the Straits of Hormuz would push Brent towards $200 a barrel. Either would be a windfall for Saudi Arabia, but that's a secondary consideration, isn't it?

Times Change: The US once believed that while everyone benefited from good schools, excellent roads, decent parks and playgrounds and public transit, the rich benefited proportionally more and thus should pay proportionally more in taxes. But the rich figured out that they could afford to turn to private replacements for shoddy public goods and services, so they stopped paying taxes and let the country's shared spaces deteriorate. “Public spending on education, infrastructure, and basic research has dropped from 12% of GDP in the 1970s to less than 3% by 2011." The public be damned.

5 comments:

Anonymous said...

"At least 15 deaths were attributed to the the shortages, which have set successively higher records in each of the last 5 years, up from 58 in 2004. " ???

kwark said...

Re "Times Change" But it's OK because since the 70's all that money saved by the rich has created ever more of those high paying jobs we Americans enjoy. Onward and upward, the rising tide floats all boats . . .the miracle of capitalism at work.

Scott Garren and Heather Shay said...

For another view on oil prices see today's http://www.nakedcapitalism.com/2012/01/chris-cook-naked-oil.html

CKMichaelson said...

Anony 121: Poor sentence structure. The 267 shortages were what's up. Sorry. Blame First Reader.

SG&HS: The (very long) NC piece is about how the price got there, my comment was on what happens once it gets there.

ckm

Blissex said...

«But the rich figured out that they could afford to turn to private replacements for shoddy public goods and services, so they stopped paying taxes and let the country's shared spaces deteriorate.»

That's a very amazingly optimistic view.

The middle and working classes were all for paying these out of taxes on themselves when the public goods were not shared with underclass (dark or brown or yellow skinned) people, and were not shy to get the rich to pay up too.

But the 14th amendment started being enforced and the labor unions, social security, public schools etc. were desegregated, and the middle and working classes would rather do without them than share them with the underclasses.

There is also the not insignificant argument that it was not desegregation per se that made the middle and working classes turn against desegregated public goods, but the extremely unwise (to say the least, "vile" could also be used) underclass riots that followed desegregation, and caused decades of spite by the middle and working classes, who were already suspicious of the attitudes of the underclasses anyhow.