Wednesday, December 10, 2008

SAR #8345

Markets are self-correcting in the same way hunger is.

Terms: Recession and depression carry with them an expectation of recovery. Depression also suggests, based on prior experience, a slow long downward spiral. Two thoughts: Given the global interlock of credit and finance, won't this depression happen a lot faster? And the word in the series after recession and depression is collapse, which does not have the built in presumption of recovery.

Piggy Banking: If your kid sister stole nickels out of your piggy bank when you were a kid, you've already got experience with investing in 90-day Treasuries, where you can turn $1 into 97 cents in just 90 days.

It's A Gas: Demand for gasoline in the US is back to last June's levels. So much for that there demand destruction thingy.

Can You Hear Me Now? Scientists from Britain's Tyndall Center for Climate Change Research now say that the struggle to avoid dangerous climate change has been lost - forfeited by human inaction - and that the world must now start preparing for things to get "very, very bad." That's a technical term.

Janus: The cheap oil era is over; the era of oil as a hindrance to future economic growth has arrived.

First Among Equals : Bernanke has castrated the Federal Open Market Committee, which used to meet to make decisions about Fed actions. Now he summons the Fed's Regional Presidents to DC to learn what decisions had been made in their name. Bernanke's assumption of these "emergency war powers" was developed with the connivance of Geithner, who will soon, reassuringly, will be Secretary of the Treasury.

Cats in the Dark: According to AIG - which cannot pay bonuses under terms of the federal bailout - a retention bonus is not a bonus. Talk is talk, promises are promises, and bonuses are money.

Slow Learner: As a kid I didn't understand the Depression; the factories were still there, the men were ready to work, the ore was still ore... Now I understand: Moody’s expects corporations to begin defaulting on their obligations in great number. Thus no one will lend to them, so they will have to shut down the factories and lay off the workers. As a kid I didn't understand the financial system. Still don't.

Note to Self: After January 20th, refer to him as "Unindicted Conspirator"

How High Is Up? Analysts argue that OPEC must make "a large cut in production" to stabilize prices. One to two million barrels a day is recommended. That's as much as a 2% drop - gasp! Put it another way: The difference between $140 a barrel and $40 a barrel is 2% of daily production. Almost a rounding error, Kemosabi.

What's for Dinner? We have eaten our way through two-thirds of the world's reserve of grains in the last 5 years. The cupboard now has but 50 day's worth. The 1° C rise in global temperature guaranteed over the next 15 years will take a major bite out of food production in almost all of the planet's breadbaskets.

Humor: MIG Investments is predicting oil to trade in a range between $36 to $47 for the next five years. Six months ago you could find experts predicting $200 oil.

Earth, Wind, and Fire: The Chinese government and the United Nations both report there is a real threat of environmental collapse leading to economic collapse in China; China's air, water and soil are too degraded to support the growing Chinese economy. Elsewhere it was reported that China is to spend $20 billion building a rail system to haul more coal to its polluting power plants.

Growing Dow-n: Dow Chemical is "streamlining" by firing 5,000, closing 20 plants and "shedding high cost assets", like health plans and retirement funding. In addition, it is going to "idle" 180 plants and "cut" 6,000 contractors (?) globally.

Porn O'Graph: What goes up, goes up.

1 comment:

Anonymous said...

Well, crap. We're gonna be jobless and are looking at being impoverished in old age, and on top of that, so are the Chinese, who are a lot tougher and more entrepreneurial than we are. So far, that's poor, scared, and threatened. Add to that hungry, very thirsty, and probably pretty sweaty. Ugh!