Runnin for office in Fannin County...
Tuesday, January 19, 2010
Disasters Far and Near
As the disaster in Haiti moves into its "Katrina" phase of organizational chaos, relief effort failure, and public health calamity, the world will get another lesson in the dangers of techno-triumphalist posturing. American authority pretends to be in flawless control of a situation that by the minute crumbles into anarchy and death as the generals strut their stuff and the CNN crews broadcast yet another feel-good segment about adopted orphans. At this point, one rainstorm is all it will take to kill what is left of the Haitian social order.
It's a tragedy for the ages, and tragedy is a fulcrum of the human condition that techno-triumphalism pretends to have vanquished. All the meals-ready-to-eat on God's green earth won't add up to a happy ending for everybody. Haiti was a disaster waiting to happen every bit as much as the Federal Reserve is for us. For decades, the USA's policy (and the UN's too) was just to stuff more food aid onto an island already so far beyond its carrying capacity for human existence that every new birth certificate was a death warrant in disguise. But free people are free to do what they will do, and in Haiti there was not much more to do than make more people.
Now the USA will also pretend that there is a Haitian government in charge -- as in the pathetic grandstanding of Secretary of State Hillary Clinton the other day -- though the Haitian government was a fiction for decades before the earthquake struck. The recent blatherings of Bill Clinton would have us believe that Haiti is poised to become an exemplar of economic development for the Caribbean once things are tidied up there. What planet are these people living on? (Answer: Planet Limousine.) Rather Haiti is the example of what life may become in nations bethinking themselves developed further along in The Long Emergency. If the figures on world crop failures for 2009 are relevant, even places like the USA may get a taste of this before the end of 2010.
On the home front we have President Obama's announcement last week of a tax on banks that received bailouts of one kind or another. This tax, he said, would amount to $90 billion over ten years. That's pretty funny, since there is no shortage of opinion to the effect that ten years from now $90 billion might buy you a box of Little Debbie Snack Cakes -- if the means of production are even there to make the darn things. Here's an idea: if the USA is going to backstop companies that are not allowed to fail, then maybe these companies should fork over hefty premiums for what is, in effect, an insurance policy. For instance, those billions now slated to be paid in in bonuses to the likes of Goldman Sachs, JP Morgan / Chase, Citibank, et cetera ad nauseum. Let them just pony up these bonuses to the taxpayers every year as long as they enjoy backstop insurance. (They'll still have very hefty salaries.) And, by the way, those bundles of money don't even cover these bank's off-balance-sheet liabilities.
I raise these indelicate points to argue that the stories we are telling ourselves these days do not reflect the real circumstances we find ourselves in, and will not help us to get through the difficult times ahead. In fact, they amount to an invitation for more tragedy. The more the USA imagines itself to be too big to fail -- and immune to the mandates of reality -- the more likely we are to fail massively. The more we indulge in techno-triumphalism and organizational grandiosity, the more chaos we invite. The signal failure for the moment is the Obama regime's unwillingness to imagine that the old economy is dead and that no amount of financial mortician's wax and rouge will bring it back to life. Stunts such as so-called Financial Crisis Responsibility Fee (the $90 billion tax over ten years) will only corrode what is left of Mr. Obama's authority as its meaninglessness reveals itself.
In the meantime, no one with any real authority has asked figures like Hank Paulson, Lloyd Blankfein, and Tim Geithner under oath exactly how Goldman Sachs managed to get paid 100-cents on the dollar for derivatives bets from the foundering AIG; and how come in the first place Goldman Sachs was short-selling the fraud-riddled derivative securities it was packaging for sale as AAA-rated paper to credulous investors; and many other pertinent questions of the day that ultimately must be answered and settled within the rule of law. Funny, too, that our constitutional law professor president hasn't demanded this from his own Department of Justice. I maintain that it's crucial to settle these matters if we don't expect to become an entirely lawless nation. It's necessary to break up the TBTF banks. It's necessary to investigate their officers, and prosecute them if the facts warrant it. It's necessary to open up the dark vaults of off-balance-sheet liabilities and dispose of them at their true value.
It's necessary to start telling ourselves a different story about where we are going. We're destined to become a different kind of society and economy. If that future economy is not based on real productive activity conducted at a scale consistent with resource realities, then we will starve to death, or watch our infrastructures of daily life crumble away to nothing, or hack each other to pieces as the the people in Haiti may do before the end of this week. Goldman Sachs and its cohorts are not necessary for the future economy of the USA. In fact, they're already dead. The real zombies of this world stalk the sidewalks of Wall Street, not the swamps of Port-au-Prince.
Tuesday, January 12, 2010
PORT-AU-PRINCE, Haiti – The Haitian capital has largely been destroyed in the most powerful earthquake to hit the country in more than 200 years. Journalists from The Associated Press describe severe and widespread casualties after a tour of streets where blood and bodies can be seen.
The damage is staggering even in a country accustomed to tragedy and disaster. AP reporters say the National Palace is a crumbled ruin and tens of thousands of people are homeless.
Many gravely injured people sit in the street, pleading for doctors many hours after the quake. In public squares thousands of people are singing hymns and holding hands.
The 7.0-magnitude quake struck at 4:53 p.m. Tuesday, leaving large numbers of people unaccounted for.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
Monday, January 11, 2010
Six Months To Live?
The economy that is. Especially the part that consists of swapping paper certificates. That's the buzz I've gotten the first two weeks of 2010, and forgive me for not presenting a sheaf of charts and graphs to make the case. Just about everybody else yakking about these thing on the Web provides plenty of statistical analysis: Mish, The Automatic Earth, Chris Martenson, Zero Hedge, The Baseline Scenario.... They're all well worth visiting.
Bank bonus numbers are due out any day now. The revolt that I expected around the release of these numbers may come from a different place than I had imagined earlier -- not from whatever remains of "normal" working people, but from the thought leaders and middling agents in administration (including the prosecutors) who, for one reason or another, have been diverting their attention, or watching and waiting, or making excuses for a couple of years now. When Frank Rich of The New York Times starts calling for Robert Rubin's head, then maybe the great groaning tramp steamer of media opinion is turning in the water and charting a new course for the port of reality.
Anyway, the grotesque carnival of rackets and lies that the US economy has become -- held together with the duct tape of stimulus cash, gamed accounting, mortgage subsidies, carry trades, TBTF bailouts, TARPS, TALFS, shell-game BLS reports, and MSNBC "green shoots" cheerleading -- gives every sign of tipping into collapse at a moment's notice. There are just too many obvious things that can go wrong, and that means there are many less obvious, hidden things that can go wrong, and isn't it tragically foolish to tempt Murphy's Law, since it operates so well without any help from us? The call is even going out lately for criminal prosecution of the current Treasury Secretary, Mr. Geithner, for engineering AIG's $14 billion credit default swap payoff to Goldman Sachs as part of the AIG bailout. Okay then, why not Paulson, Bernanke, Blankfein...?
But the other rings of the circus are fully occupied by clowns and dancing bears, too. Even with sketchy-looking stock market prospects for 2010, it's hard to explain why the world would run into US treasury bonds, especially a few months from now, after the initial rush-to-safety -- that is, when you could just as easily buy Canadian or Swiss franc denominated short-term bills. And then what happens when the Federal Reserve has to eat all the uneaten treasuries, while it's already choking to death on collateralized debt obligations and related worthless toxic trash securities? After all, the greenbacks we swap around are called Federal Reserve Notes.
Why would anybody think that the housing market is going to keep levitating? A big fat "pig" of adjustable rate mortgages (i.e. mortgages that will never be "serviced") is about to move through the "python" of the housing scene, shoving millions more households into default and foreclosure. Meanwhile, local and regional banks are choking on real estate already in default that they are afraid to foreclose on and have been keeping off the market through 2009 in order to not send the price of houses down further and put even more households "under water" for houses worth much less than the face value of their mortgage. I doubt that the banks are doing this out of the goodness of their hearts, but whatever the motive, this racket of just sucking up bad loans can't go on forever. At some point, a banking system has to be based on credibility, on loans actually being paid back, or it will break, and we are close to the breaking point.
The pathetic truth at the center of the housing fiasco is that prices have to come down further if any normal wage-earner will ever afford to buy a house again in America on anything like normal terms. Anyway, sooner or later the banking system is going to have to upchuck the "phantom inventory" of un-foreclosed-on houses, and sell them off for whatever they can get, or else a lot of banks are going to go out of business.
They may go down anyway, because the catastrophe of commercial real estate is following right on the heels of the fiasco in residential real estate. The vast oversupply of malls, strip malls, office parks, and other furnishings of the expiring "consumer" economy is about to become the biggest liability that any economy in world history has ever seen. Who will even want to buy these absurd properties cheaply, when they will never find any retail tenants for the badly-built structures, nor be able to keep up with the maintenance (think: leaking flat roofs), or retrofit them for anything? In a really sane world, a lot of these buildings would go straight to demolition-and-salvage -- except that it costs money to do that, and who exactly right now will make a market for used cinder blocks and aluminum window sashes? I expect these places to become squats for the desperate homeless.
Then there are the bankrupt states, led by the biggest, of course -- California and New York -- but with plenty more right behind, whirling around the same drain (probably forty-nine of them with the exception of that fiscal Nirvana, North Dakota!). Even if they manage to con bailouts from the bailout-weary federal government, the states are still going to have to winnow down the ranks of their public employees (throwing more middle-class households into foreclosure and penury), while they hugely reduce public services, especially to the poor, the unwell, and the unable. That alone will redound into very visible realms of daily life from public safety (rising crime) to the decay of roads and bridges.
Perhaps the most troubling buzz in the air this first month of 2010 are rumors of coming food shortages due to widespread crop failures around the world in the harvest seasons of 2009 (Emergency Food Supply, Food Crisis For Dummies, 2010 Wall Street Predictions.) If the US Department of Agriculture hasn't flat-out lied about crop numbers in 2009, the signs are that their statistical reports are at least inconsistent with real grain storage numbers and commodities prices. And why would the USDA tell the truth if every other federal agency is reporting gamed numbers? Given the crisis in capital and lending, one also has to wonder how farmers will be able to borrow money to get their crops in this year.
Finally there's the global energy scene. The price of oil starts this week over $83 a barrel. That puts it about $1.50 from the price "danger zone" where it begins to kill economic activity in the USA. Things and procedures just start to cost too much. Gasoline. Deisel fuel (and, by the way, that means another problem for food production going into the 2010 planting season). One especially eerie situation the past few weeks has been the de-coupling of moves upward in oil from moves in the value of the dollar. Lately, oil has been going up whether or not the dollar has gone up or down. Two weeks ago the dollar went below 1.42 against the Euro and today it's above 1.45, and oil has been rising steadily from the mid $70 range all the while. 2010 may be the year that we conclusively realize that world oil demand exceeds world oil supply -- and that global oil production cannot hold above 85 million barrels-a-day no matter what we do.
These are the things that trouble my mind at three o'clock in the morning when the wind rises and things bang around spookily. Gird your loins out there for a savage season or two.
Wednesday, January 06, 2010
... AN ARCTIC AIRMASS TO BRING FRIGID TEMPERATURES TO NORTH TEXAS THURSDAY THROUGH SATURDAY...
AN ARCTIC COLD FRONT WILL ARRIVE INTO NORTH TEXAS WEDNESDAY NIGHT AND BRING AN EXTENDED PERIOD OF FREEZING TEMPERATURES TO THE REGION. TEMPERATURES WILL DROP BELOW FREEZING AFTER MIDNIGHT THURSDAY AND SHOULD BRIEFLY RISE ABOVE FREEZING SATURDAY AFTERNOON FOR MOST LOCATIONS ACROSS NORTH TEXAS. GUSTY NORTH WINDS 20 TO 30 MPH WILL ACCOMPANY THE ARCTIC FRONT... WHICH WILL RESULT IN FRIGID WIND CHILLS INTO THE TEENS AND SINGLE DIGITS BY THURSDAY MORNING ACROSS MOST OF NORTH TEXAS. WIND CHILLS MAY DROP BELOW ZERO FOR AREAS NORTH OF INTERSTATE 20 FRIDAY MORNING.
IN ADDITION TO THE ARCTIC AIR... A CHANCE OF LIGHT RAIN WILL BE POSSIBLE WEDNESDAY EVENING... BEFORE CHANGING OVER TO PATCHY LIGHT FREEZING RAIN OR DRIZZLE BEFORE DAYBREAK THURSDAY MORNING... AS THE ATMOSPHERE SLOWLY DRIES OUT. AREAS NORTH OF A MERIDIAN TO HILLSBORO TO ATHENS LINE WILL BE THE MOST LIKELY LOCATIONS TO SEE FROZEN PRECIPITATION. NO SIGNIFICANT ACCUMULATION OF ICE IS EXPECTED AT THIS TIME. HOWEVER... SOME PATCHY LIGHT ICING IS POSSIBLE BETWEEN MIDNIGHT AND DAYBREAK THURSDAY MORNING... MAINLY ON ELEVATED BRIDGES AND OVERPASSES THAT REMAIN WET AS THE ARCTIC AIR MOVES IN. THIS COULD RESULT IN SOME SLICK SPOTS FOR THE THURSDAY MORNING COMMUTE.
RESIDENTS ARE ENCOURAGED TO MAKE PREPARATIONS NOW.
Monday, January 04, 2010
The Futility Economy by James Howard Kunstler
http://kunstler.com/blog/2010/01/the...nomy.html#more
The Futility Economy
by James Howard Kunstler
on January 4, 2010 6:09 AM
It's the first business day of the new year and oil is trading above $80 a barrel, which means the price has re-entered the danger zone where it can crush industrial economies. This is a central element of the predicament we find ourselves in. The US economy is essentially a Happy Motoring economy. During the whole nervous period since the collapse of Lehman Brothers, American gasoline consumption hardly went down at all, though so many other activities collapsed, from house-building to trucking. Yesterday, The Seattle Times published a story with the idiotic headline: Oil Touches $80 on US Economy, Demand Optimism. Apparently, they think high oil prices are "a good sign."
How much can a nation not get it? Would $100 oil ignite a new orgy of "consumer" spending and another round of investment in commercial real estate? Welcome to the Futility Economy. This is the economy where Nature and its material companion, Reality, punish us for our stupidity and fecklessness. This is the economy that will tear the United States apart, after it bankrupts us at every level, and mercilessly drives the population down by one-third through starvation, homelessness, violence, disease, and sheer political cruelty.
Whatever you thought our economy was the past thirty years -- whatever model of it you have in your head -- that is definitely not what we are going back to. Like one of Dickens's Yuletide ghosts, Reality is leading us by the hand into new circumstances. We resist like crazy. We throw our hands over our eyes. We don't want to look. We want to return to the comfort of our dreary routines -- living in places that aren't worth caring about, weaving endlessly in freeway traffic, drawing a paycheck at the air-conditioned cubicle, inhaling Buffalo wings by the platterful, with periodic side-trips to the state-chartered casino where there's always a chance of scoring a lifetime's income on one lucky bet. And at the end of the day, you can retire with a simulated prostitute on your laptop screen! And not even have to fork over a dime -- except perhaps for the Internet connection fee.
Reality is taking us out of that familiar, if sordid, realm, whether we like it or not. Our destination is an everyday economy where you rarely travel far from the place you live, where you have to make provision for you own health, your own old age, your own income, your own diet, your own security, and your own education. If you're really fortunate, some or all of these necessities can be obtained in conjunction with your neighbors in the place where you live -- but don't expect an increasingly mythical federal government to supply any of it. Expect a new and different way of organizing households based on extended families and kinship groups. Be prepared for agriculture to return to the foreground of everyday life, where farming is back at the center of the economy. Think about how you will cultivate your best role in a social network so the things you do will be truly valued by the other people who know you. Learn how to make your own music and write your own scripts. Try to study history. Resist cults. Keep your mind clear and your senses sharp.
Even if you have a dim sense that this is where we're headed, most of you probably want to stay where you are. The investments we've made in the current mode of existence are so monumental that we can't imagine letting go of them. This will be the theme of American life for the next couple of years as we struggle mightily to escape the confining armor of the Futility Economy and move closer to ways of life that have more of a future. Right now, all the power and authority in our culture has dedicated itself to remaining inside that old armor.
The Master Wish around the country, including among people who ought to know better, is that we can "solve" our economic problem by finding some other way to run all the cars. Even hardcore environmentalists yammer incessantly about hybrid and "plug-in" cars as the "solution" to our blues. One of Barack Obama's first acts as president was to "save" the giant car companies. This is exactly the kind of signature behavior of a Futility Economy. It's based on the idea that we have to continue driving cars all the time and for everything, at all costs.
The religion of the Futility Economy is Techno-Triumphalism, which is the belief that an endless sequence of magic tricks performed by shaman scientists can defeat the Second Law of Thermodynamics, which rules the universe -- which true scientists ought to know cannot be defeated. Their colleagues, the shaman economists believe in parallel magic tricks, such as the idea that increased borrowing can "solve" a problem of runaway over-indebtedness. These are the actions that currently engage the people in charge of things in our society.
Given this current state of things, and the current course we're on, my guess is that when the falsity of these ideas and actions are exposed, they will become evident not gradually but very rapidly and shockingly. The people in charge of things will lose their vested legitimacy in a flash, and the institutions they command will become irrelevant overnight. The process would be traumatic for all of us as routines we counted on for a thousand particulars of everyday life vanish or collapse. A Great Indignation will rise across the land over the perceived swindles involved. A lot of effort will go into avenging the swindles instead of rebuilding an economy out of the ashes of futility.
Personally, I would like to see a different outcome. I'd like to see a new birth of intelligence, perhaps in the same way that President Lincoln invoked "a new birth of freedom" after an earlier convulsion in our history. The question is: do we have the resources of national character left to make that happen?
http://kunstler.com/blog/2010/01/the...nomy.html#more
The Futility Economy
by James Howard Kunstler
on January 4, 2010 6:09 AM
It's the first business day of the new year and oil is trading above $80 a barrel, which means the price has re-entered the danger zone where it can crush industrial economies. This is a central element of the predicament we find ourselves in. The US economy is essentially a Happy Motoring economy. During the whole nervous period since the collapse of Lehman Brothers, American gasoline consumption hardly went down at all, though so many other activities collapsed, from house-building to trucking. Yesterday, The Seattle Times published a story with the idiotic headline: Oil Touches $80 on US Economy, Demand Optimism. Apparently, they think high oil prices are "a good sign."
How much can a nation not get it? Would $100 oil ignite a new orgy of "consumer" spending and another round of investment in commercial real estate? Welcome to the Futility Economy. This is the economy where Nature and its material companion, Reality, punish us for our stupidity and fecklessness. This is the economy that will tear the United States apart, after it bankrupts us at every level, and mercilessly drives the population down by one-third through starvation, homelessness, violence, disease, and sheer political cruelty.
Whatever you thought our economy was the past thirty years -- whatever model of it you have in your head -- that is definitely not what we are going back to. Like one of Dickens's Yuletide ghosts, Reality is leading us by the hand into new circumstances. We resist like crazy. We throw our hands over our eyes. We don't want to look. We want to return to the comfort of our dreary routines -- living in places that aren't worth caring about, weaving endlessly in freeway traffic, drawing a paycheck at the air-conditioned cubicle, inhaling Buffalo wings by the platterful, with periodic side-trips to the state-chartered casino where there's always a chance of scoring a lifetime's income on one lucky bet. And at the end of the day, you can retire with a simulated prostitute on your laptop screen! And not even have to fork over a dime -- except perhaps for the Internet connection fee.
Reality is taking us out of that familiar, if sordid, realm, whether we like it or not. Our destination is an everyday economy where you rarely travel far from the place you live, where you have to make provision for you own health, your own old age, your own income, your own diet, your own security, and your own education. If you're really fortunate, some or all of these necessities can be obtained in conjunction with your neighbors in the place where you live -- but don't expect an increasingly mythical federal government to supply any of it. Expect a new and different way of organizing households based on extended families and kinship groups. Be prepared for agriculture to return to the foreground of everyday life, where farming is back at the center of the economy. Think about how you will cultivate your best role in a social network so the things you do will be truly valued by the other people who know you. Learn how to make your own music and write your own scripts. Try to study history. Resist cults. Keep your mind clear and your senses sharp.
Even if you have a dim sense that this is where we're headed, most of you probably want to stay where you are. The investments we've made in the current mode of existence are so monumental that we can't imagine letting go of them. This will be the theme of American life for the next couple of years as we struggle mightily to escape the confining armor of the Futility Economy and move closer to ways of life that have more of a future. Right now, all the power and authority in our culture has dedicated itself to remaining inside that old armor.
The Master Wish around the country, including among people who ought to know better, is that we can "solve" our economic problem by finding some other way to run all the cars. Even hardcore environmentalists yammer incessantly about hybrid and "plug-in" cars as the "solution" to our blues. One of Barack Obama's first acts as president was to "save" the giant car companies. This is exactly the kind of signature behavior of a Futility Economy. It's based on the idea that we have to continue driving cars all the time and for everything, at all costs.
The religion of the Futility Economy is Techno-Triumphalism, which is the belief that an endless sequence of magic tricks performed by shaman scientists can defeat the Second Law of Thermodynamics, which rules the universe -- which true scientists ought to know cannot be defeated. Their colleagues, the shaman economists believe in parallel magic tricks, such as the idea that increased borrowing can "solve" a problem of runaway over-indebtedness. These are the actions that currently engage the people in charge of things in our society.
Given this current state of things, and the current course we're on, my guess is that when the falsity of these ideas and actions are exposed, they will become evident not gradually but very rapidly and shockingly. The people in charge of things will lose their vested legitimacy in a flash, and the institutions they command will become irrelevant overnight. The process would be traumatic for all of us as routines we counted on for a thousand particulars of everyday life vanish or collapse. A Great Indignation will rise across the land over the perceived swindles involved. A lot of effort will go into avenging the swindles instead of rebuilding an economy out of the ashes of futility.
Personally, I would like to see a different outcome. I'd like to see a new birth of intelligence, perhaps in the same way that President Lincoln invoked "a new birth of freedom" after an earlier convulsion in our history. The question is: do we have the resources of national character left to make that happen?
Saturday, January 02, 2010
Road Trip
Eiffel tower with red hat...
Mr Giersch and I went on another road trip today...this time to Paris, TX...an interesting little town with loads of urban decay and a huge cemetary that may well house more folks than there are currently living in Paris...but it was a nice trip, and found numerous places to shoot in the future...the more we travel around out in East Texas the more we find to shoot! And its always nice to come across the friendly people that live in East Texas...
More to come about Paris tomorrow...
Tuesday, December 22, 2009
Blue Christmas
As the end-credits rolled for James Cameron's new movie, Avatar, the audience burst into rowdy applause. It seemed to me that they were applauding the sheer computerized dazzlement of the show -- but in the story itself they had just watched the US suffer a humiliating defeat on a distant planet. In the final frames, American soldiers and the corporate executives they had failed to protect were shown lined up as prisoners-of-war about to embark on a death march.
More to the point, the depiction of our national character through the whole course of the film was of a thuggish, cruel, cynical, stupid, detestable, and totally corrupt people bent on the complete destruction of nature. Nice. And the final irony was that Cameron had used theatrical technology of the latest and greatest kind to depict America's broader techno-grandiosity -- as the army's brute robotic warriors fell to the spears and arrows of the simple blue space aliens. Altogether, it was a weird moment in entertainment history, and perhaps in the American experience per se. No doubt audiences overseas will go wild with delight, too, but perhaps with a clearer notion of what they are clapping for than the enthralled masses of zombie Americans.
The infatuation with technology, and the disgusting cockiness that goes with it (so well-captured in Avatar), is but one facet of the psychosis gripping the nation -- and by that I mean the profound detachment from reality. We have no idea what is happening to us and, naturally, no idea of what we are going to do. I sat in a bar Friday evening with a financial reporter from a national newspaper, trying to explain the peak oil situation and what it implied for our economy. He had never heard it before. The relationship between energy resources and massive debt was new to him. (It also came up in conversation that he could not tell me what the Monroe Doctrine was about, despite a history degree from Yale.) There you have a nice snapshot of the mainstream media in this land.
This year, America can look for a nice lump of coal in its Christmas stocking. That lump will be called "the recovery." This recovery consists of a massive self-deception, made up of accounting tricks and falsified statistics, with a sugar-coating on top of sheer disbelief that the outcome could be anything but a particular happy ending -- namely, the continued levitation of the unsustainable. What is most amazing about Mr. Cameron's holiday blockbuster is the explicit message that America is a society that deserves to be punished (and humiliated!) by others who manage their own relations with reality better than we do. I wonder how much that will secretly account for its popularity. I wonder what the leaders of China will make of it.
The other current embodiment of national character failure, Tiger Woods, golfer, has also dazzled the American public. Personally I find it much more interesting to learn that he was a really lousy tipper than that he got a lot of action on the side with opportunistic bar girls, porn stars, and other denizens of the sports-entertainment netherworld. Is it not also amusing that golf is even taken seriously as an athletic pursuit? I mean, why not pancake-flipping? Or dice? Or shooting rats at the landfill? This is the kind of knucklehead culture we have become after six decades of the softest life imaginable. Anyway, I'm not shedding any tears for Tiger. Even if all his endorsements dry up and his ex-wife takes him to the cleaners for a hundred million or so, he'll still be left with enough cash to pay for porn stars and lobster tails until the end of time, especially if he keeps his tipping policy at its current level.
Next week I'll put out my forecast for the coming year, 2010. But for now I'd like to leave readers with this Christmas present: a preview scene from the sequel to my novel of the post-oil American future, World Made By Hand....
Tuesday, December 15, 2009
Hostage Situation
Apologies for server problems that dogged this website most of Monday....
Okay, so President Obama didn't run for office to help out a bunch of fat cat bankers on Wall Street - or so he said on CBS's "60 Minutes" show Sunday night. But maybe it didn't seem like such a bad idea once the election was over. Anyway, the net effect of his administration's actions since then - all nicely documented in the latest Rolling Stone dispatch from the choleric Matt Taibbi - was an immense helping out of fat cat bankers on Wall Street at the expense of a lot of American citizens who work elsewhere, if they are lucky enough to have income-producing work.
Mr. Obama has really offered no satisfactory explanation for why he larded his department of the US government from the get-go with so many agents and recent graduates of Wall Street's biggest firms. Nor has any clear reason emerged for the absence of criminal prosecution - or even investigation - by the Attorney General in such obvious cases of criminal fraud and insider trading as Goldman Sachs's double-window technique for hedging its own issues of mortgage-backed securities. By comparison, the Savings-and-Loan scandal of a decade ago led to thousands of criminal convictions.
Last week, the Right Reverend Lloyd Blankfein, still "doing God's work," announced in a "cash-for-pitchforks" deal that the top thirty executives of his company, Goldman Sachs, would not receive dollar bonuses this Christmas but instead will get stock that ostensibly can't be sold for five years. Those of us in the USA who enjoy a good mystery are wondering exactly what fine language in this memorandum drawn up by a team of thousand-dollar-an-hour lawyers contains the magic catch that frees up the GS execs to convert this stock into money, say, on February 2, 2010 - because you know it's got to be in there somewhere.
Anyway, insofar as the top 30 GS employees is made up strictly of people who are already multi-deca-millionaires, notice that the other 31,670 employees of GS, including not a few hundred in the upper income tranches, will be receiving cash bonuses as usual this year from a bonus pool that amounts to about $16 billion (sixteen thousand million dollars). Of course, being a publicly-held company, GS will have to announce soon what those cash bonuses are. Perhaps this is why the news also got out about GS employees seeking handgun permits in bunches. Exactly how they get around New York City's special "Sullivan Law," which supercedes the New York State permitting rules, has not been explained.
Meanwhile, all the stops are being pulled out to produce a mighty wall-of-sound in dubiously-reported statistics pertaining to national unemployment and retail sales - the first way down and the latter up, supposedly - in an attempt to squeeze one last giant potlatch Christmas out of the dying "consumer" economy. Jew though I may be, I confess that Christmas is for me. I'm sorry, fellow Chosen People, but Hanukkah is just plain boring - the equivalent of Danish Modern furniture for the spirit. Give me Christmas, with its pagan yule logs, feasts, and revels! One can enjoy the holiday doings and trappings without subscribing to either the divinity of Santa Claus or the Babe of Nazareth. But Christmas does invite us to indulge in all kinds of "hopes" and delusions, and the main one crackling through the American zeitgeist this year is the wish that our national life will resume the yeasty expansion of goodies that most living citizens regard as baseline normality - namely, a never-ending orgy of credit card spending and real estate flipping.
This wish is doomed to disappointment. The cold boney finger of reality, like Dickens's spectral Ghost of Christmas yet-to-come, points to many a tableau of desolation in the decade ahead... of a lost "normality," of evictions, foreclosures, tragedies, ruinations and most of all dashed expectations - assuming that the vast public clings to habits and behaviors no longer suited to the mandates of new circumstances in our world. And it is the greatest disservice of all at this holiday time for respected authorities to pimp that wish. What a shabby thing it has become anyway - a sordid spectacle of multitudes moiling in chain store checkout lines en route to the certain anguish of buyer's remorse in the parking lot.
Can't we come up with a better American Dream, even one that includes Christmas? I think we can. It would require the liberation of American citizen's minds from their thralldom to bigness in every realm from work to worship to recreation. If you think Barack Obama is a hostage to Wall Street, reflect for a while on the people's self-surrender to the tyranny of everything that diminishes us to mere "consumers." We're on a journey - and we don't know it - back to a nation of communities where your character really matters, and where character rests on whether your deeds comport with truthfulness. Many will be dragged kicking and screaming upon that journey, and many a dark night will be passed in the cold and damp on the way. But it will take us to a place where the hearths are burning brightly and the estranged spirits of our national character await a reunion with us: fortitude, patience, generosity, humor. That will be a Christmas to live for and remember!
Saturday, December 12, 2009
Thursday, December 10, 2009
Cowboys of the Grand Canyon II photography series by Brian J Magnuson featured at Laura Moore Fine Art Studios in McKinney Dec. 12 By Laura Moore Fine Art Studios Dec 7, 2009
McKINNEY, TEXAS - - Brian J. Magnuson has managed once again to catch a rare glimpse of the life of a modern day cowboy in one of the few remaining places where cowboys still work full time. In March, Magnuson traveled to the Grand Canyon and continued his ongoing photography series. Magnuson's personable style proves to connect anew with these seasoned cowboys allowing an insider's look at their daily routine. This exhibit of over twenty black and white images at Laura Moore Fine Art Studios beautifully captures a different scene of the rugged Arizona cowboys without rodeos or cattle drives, but rather working the mules down the steep canyon descent.
Magnuson's stunning classically hand printed darkroom images take the viewer behind the scene for a detailed look at what goes on in the life of a Grand Canyon cowboy from the early preparations of the packers, well before sunrise, to fellowship of the cowboys at the end of the long hard day. The viewer will be placed in front of the farrier shoeing difficult mules, the saddle maker making repairs and dramatic views as riders on the backs of the mules climb out of the deep canyon.
Magnuson, an artist and educator in Plano, has been photographing things of interest and importance for fourteen years and has held many one-man shows across America as well as been included in several group showings. His work has been promoted on Good Morning Oklahoma television program, Dallas Morning News Guide and other publications.
"Cowboys of the Grand Canyon II" will open with an artist's reception on Saturday, December 12th from 7 p.m. - 10 p.m. Through January 6, 2010, at Laura Moore Fine Art Studios, 107 S. Tennessee in historic downtown McKinney.
Hours: Mondays through Saturdays from 1 p.m. to 5 p.m.
Free admission.
This is a family friendly exhibition and all are welcomed. 214.914.3630. www.lauramooreart.com.
Tuesday, December 08, 2009
Climate, Oil, War, and Money
Against a greater welter and flow of incoherence jerking the nation this way and that way en route to collapse comes "ClimateGate," the latest excuse for screaming knuckleheads to defend what has already been lost. It is also yet another distraction from the emergency agenda that the United States faces - namely the urgent re-scaling, re-localizing, and de-globalizing of our daily activities.
What seems to be at stake for the knuckleheads is their identity, their idea of what it means to be an American, which boils down to being an organism so specially blessed and entitled that it is excused from paying attention to reality. There were no doubt plenty of counterparts among the Mayans when the weather changed and their crops failed, and certainly the Romans had their share of identity psychotics who doubted reality even when Alaric the Visigoth was hoisting off their household treasure.
Reality doesn't care if we are on-board with its mandates or not. The human race has to get with whatever program reality is serving up at a particular time. Are we shocked to learn that scientists fight among themselves and cheat as much as congressmen? Does that really change the relationships we understand about parts-per-million of carbon dioxide in the earth's atmosphere and the weather?
What the people of the world can do or will do about a change in climate is something else. My guess is that the undertow of entropy is now too great to provoke any meaningful unified change in behavior. The collapse of the US economy is too close to the horizon, and the so-called developing nations will have problems equally severe. In the meantime, it is unlikely that any of the major players will burn less coal and oil, or not cheat on each other even if they pledge to burn less. People who are not knuckleheads will make the practical arrangements that they can. These will, by definition, be localized, small-scale, and non-global communities, doing what they would have to do anyway.
A parallel identity mania afflicts those who have decided that the Bakken shale oil deposits and the Marcellus gas play will allow the USA to cancel any modifications to our living arrangements. This cohort of knuckleheads wants to believe the public relations of the oil and gas industry, and in particular the bankers who are arranging the financing for these ventures. The facts are irrelevant to their identity-claims (that the USA has limitless energy resources). In fact, the Bakken shale formation is unlikely to produce more than a few hundred thousand barrels of oil a day in a nation used to burning about twenty million. A few hundred thousand might mean a lot if were only used to light kerosene lamps, but it is unlikely to keep the faithful motoring off to WalMart and Walt Disney World - which is the exact expectation of the knuckleheads.
Shale gas is a similar story. It will be too expensive to get out of the tight rock at a flow that will allow business as usual to continue. It certainly won't be produced at under $10 a unit, and the nation's comprehensive bankruptcy accelerates every day, making it less likely that the public can pay premium prices within the framework of our current living arrangements.
*
Who the hell really knows what we're up to in Afghanistan. President Obama tried to present a coherent explanation last week but, frankly, it all just seemed an exercise in futility - and reminded me of those countless wealth-sapping expeditions the Roman army made to the frontiers of their own empire during the period of collapse. Paul Craig Roberts, the former Reagan treasury official turned fierce critic of bail-out economics, said on a podcast last week, that he thought our adventure there was about protecting a Unocal oil company pipeline from Turkmenistan. Sorry, Paul. I can't buy that. Like, we're going to post soldiers every two hundred yards across some of the most forbidding terrain in the world? And keep them posted there, and provisioned... forever? I don't think so.
One pet theory of mine about the Af-stan adventure is that we wanted to make a baloney sandwich out of Iran by posting armies on both sides of them, with Iraq and Af-stan as the Wonder Bread. All I can say about that is that it doesn't seem to have affected Iran much during the past six years, or modified or influenced their behavior favorably. Or perhaps it just allows us to stand close by to Pakistan, in case the Islamic maniacs get their mitts on central power there - and by extension, on a bagful of nukes. It's a lot less easy to believe that we have any prospects for really domesticating and/or democratizing Af-stan itself. And even if we do manage to suppress the Taliban for a few years, are we prepared to continue the mission... forever? As soon as we're out of there, the Afghanis are back to tribal business-as-usual. So why not just bail while the bailing is good? Make like the Russians and the Brits before them and cut our losses? Is our prestige at stake? And by extension our identity as world-savers?
I suppose this leads to larger questions of a.) the stability of Islamic Central Asia in general, and b.) the capabilities and intentions of the maniacs within it who would like to inflict punishment on us Western crusader types. One popular theory, of course, is that they only feel that way because of our intrusions in the Islamic Ummah; that they would back off and mind their own business if we would just quit sending our knights over there. I have no idea if this is true, though one would suppose there is a certain inertia in play that would keep their animosities at work for a long time to come, not to mention the millions of under-employed young men who seek to work off their testosterone by blowing things up.
One thing you can state pretty categorically about the Af-stan war: it sure is a good way to blow an additional one trillion dollars worth of capital - that is, money we lend to ourselves, which leads to the next link-in-the-chain: the destiny of our national finances. If a clerk at H and R Block sat down for an hour with Uncle Sam, he'd surely be reaching for the Pepto-Bismol after five minutes. We've been able to play games with ourselves for a whole year about the true state of our capital resources. It is a mighty big system, kept chugging along on little more than inertia, as things will when they are headed downhill and gravity exerts its influence. But it begins to seem now like a great reeking freight train of toxic waste out-of-control on the downgrade and headed for a very nasty smash-up. The Green Shoots crowd - a sub-category of identity maniacs, who think the USA is immune to the laws of history and physics - has made common cause with the oil and climate knuckleheads to proclaim that we are returning to normal, back to the "consumer" orgy, the suburban sprawl nexus of McHousing and miracle mortgages, and new frontiers of corporate profit-raking.
They are tragically wrong. Instead, we're headed into the wildest king-hell debt workout that the world has ever seen, which will propel a lot of people used to working in air-conditioned cubicles into a world made by hand. We march day by day into the great holiday season with mortgages going unpaid and the credit cards getting cancelled and money disappearing and the fears and grievances mounting. Pretty soon, the folks doing "God's work" at Goldman Sachs (and their tribal kin on Wall Street) will announce their annual bonuses (because they are publicly-held companies, which have to do so). Won't that be a galvanizing moment for us all?
Tuesday, December 01, 2009
Run on the U.S. Dollar ....Soon
Nov 30, 2009 - 04:33 PM
By: DailyWealth
Porter Stansberry writes: It's one of those numbers that's so unbelievable you have to actually think about it for a while...
Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.
Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."
What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.
When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.
The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."
The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.
So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.
The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.
According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.
Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.
So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.
Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.
So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.
One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.
All of this is going to lead to a severe devaluation of the U.S. dollar... Which I expect to happen within 18 months. I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory, which was published last week. Coincidentally, America's paper of record – the New York Times – repeated our warnings (nearly word for word) last weekend. Word is getting out.
If you haven't taken steps to protect yourself from the coming devaluation – like owning gold and silver bullion, foreign real estate, and farmland – make sure you do it soon. The dollar rout is coming.
Good investing,
Porter Stansberry
http://www.marketoracle.co.uk/Article15449.html
Nov 30, 2009 - 04:33 PM
By: DailyWealth
Porter Stansberry writes: It's one of those numbers that's so unbelievable you have to actually think about it for a while...
Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.
Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?
How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."
What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.
When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.
The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."
The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.
So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.
The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.
According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.
Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.
So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.
Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.
So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.
One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.
All of this is going to lead to a severe devaluation of the U.S. dollar... Which I expect to happen within 18 months. I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory, which was published last week. Coincidentally, America's paper of record – the New York Times – repeated our warnings (nearly word for word) last weekend. Word is getting out.
If you haven't taken steps to protect yourself from the coming devaluation – like owning gold and silver bullion, foreign real estate, and farmland – make sure you do it soon. The dollar rout is coming.
Good investing,
Porter Stansberry
http://www.marketoracle.co.uk/Article15449.html
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