Steve Bull's Blog, page 1242
December 1, 2017
Climate Crisis, ‘Smart’ Growth and the Logic of Calamity
A few years back at a Leftish gathering a group of self-described Marxist economists channeled liberal Democrat Paul Krugman’s explanation of the Great Recession without apparently knowing of Mr. Krugman’s thesis. Basically, a self-perpetuating recession had a grip on the economy, Wall Street was a catalyst of the crisis but ultimately only a bit player, money is economically ‘neutral,’ and government spending could raise demand and end the recession.
This is all standard fare in liberal economics. Within the circular logic of the genre, it circles just fine. What was odd was hearing it from self-described Marxists. Since Wall Street created the money that fueled the housing bubble and bust through predatory lending, how was its role not (1) pivotal and (2) political? If money is ‘neutral,’ why have financial asset prices responded so favorably (for their owners) to asset purchases by global central banks? And finally, where is the class analysis?
In similar fashion, UMASS Amherst economist Robert Pollin arguedrecently that capitalist economic production is necessary to maintain social wellbeing. The object of his disparagement is the suggestion that a planned reduction in economic growth (‘degrowth’) is the most probable way of resolving climate crisis. For the uninitiated, the contention that challenges to capitalist production will hurt ‘the little people’ has been a rhetorical tactic of capitalist economists for at least a century now.
Graph: Real (inflation-adjusted) Per Capita GDP is more than double today what it was in 1970. In the U.S. in 1970 mass starvation was notably absent. So people could conceivably not only get by if U.S. GDP were halved, but could thrive. The problems with doing so are (1) social complexity has been built into the political economy and (2) unwinding this complexity requires planning and the political will to do so. However, climate crisis poses the threat of unplanned degrowth of similar or greater magnitude. Source: St. Louis Federal Reserve
…click on the above link to read the rest of the article…
What We Can Do…
Until enough people’s minds are changed about coercion and collectivism, resistance is futile. The debate will continue to be about how much should be stolen from whom and for what purpose – rather than about whether anything should be stolen by anyone for any purpose.
As things are, many people believe it is ok to steal from others – provided the stealing is done on their behalf by other people (these are called “tax collectors”) and the stolen goods are called by pleasant but intellectually dishonest, morally evasive names (examples include Social Security, welfare, foreign aid, grants and so on).
Using this technique of doublethink, people are able to do things to other people – or urge they be done to other people, on their behalf – without feeling ashamed or guilty, as they would if they were to do these things themselves, personally.
This “surgical excision” of the psychologically normal human revulsion for other-than-defensive violence and for the use of violence to take things from others is the keystone of the coercive collectivist system. Dislodge it and the whole edifice collapses.
It is that simple – and that hard.
Simple, because the moral principle is already established.
Excluding psychological defectives – the relatively small population in every society that does not feel ashamed or guilty about the use of violence (these people are called “criminals”) most people do feel ashamed and guilty when they steal or resort to violence.
And hence, most people do not steal or resort to violence.
It is a broadly accepted moral principle that theft and violence are wrong things; that those who steal and threaten to harm others in order to get what they want are not good people. This is half the battle, already won.
…click on the above link to read the rest of the article…
Australian Banks – First The Housing Bubble Bursts, Now A Public Inquiry
We keep returning to the subject of Australia and the growing signs that its bubble economy is bursting. Earlier this month, we discussedhow the world’s longest-running bull market – 55 years – in Australian house prices appears to have come to an end. We followed this up with “Why Australia’s Economy Is A House Of Cards” in which Matt Barrie and Craig Tindale described how Australia’s three decades long economic expansion had mostly been the result of “dumb luck”.
As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.
Last week, in “The Party’s Over For Australia’s $5.6 Trillion Housing Market Frenzy”, we highlighted some scary metrics for Australia’s housing bubble – notably how the value of Australian housing is more than four times gross domestic product – higher than other nations with housing bubbles, e.g. New Zealand, the UK and Canada. Two days ago, we noted the number of Australians optimistic about the year ahead had plunged to a record low.
Moving on to the nation’s banks, while Australian households are the second most indebted in the world, its banks are the most exposed to housing debt…
…which doesn’t augur well if, as we expect, the housing bubble deflates. We pointed out that an additional risk for Australia’s banking sector, which certainly wouldn’t help the property market either, was the growing demand for a public inquiry. This follows a series of scandals relating to misleading financial advice, attempted rate-rigging, fee gouging and alleged breaches of anti-money laundering laws. According to Australia’s ABC News.
…click on the above link to read the rest of the article…
November 30, 2017
OPEC Agrees To Extend Oil Supply Cuts Until End Of 2018: Bloomberg
With OPEC delegates sequestered in a Vienna conference room, as they negotiate the proposed 6-9 month production cut extension, at least one appears to be leaking the decision process to media outlets, because moments ago Bloomberg reported that OPEC ministers have agreed to extend their production cuts until the end of 2018 – agreeing with the Saudi-proposed 9 month extension – and discussions have now moved on to the mechanism that will be used to review the agreement in the middle of the year.
OPEC AGREES TO EXTEND OIL SUPPLY CUTS TO END OF 2018: DELEGATE
OPEC TALKS MOVED ON TO DETAILS OF MID-YEAR REVIEW: DELEGATE
These were some of the earlier headlines heading into the “announcement”:
IRAQ SAYS RUSSIA JOINING IN EXTENDING OUTPUT CUTS TO END OF ’18
SAUDI MIN: WE WILL REVIEW OUR EFFORTS IN JUNE NEXT YEAR
SAUDI MIN: OPEC+ MUST DO MORE BECAUSE OVERHANG REMAINS
AL-FALIH: IN 2Q AND 3Q, WE’LL SEE HEALTHY INVENTORY DRAWDOWNS
IRAQ COMMITTED TO LEVEL OF OPEC CUTS
U.A.E.: OPEC LOOKING FOR WIDER GROUP OF COUNTRIES TO JOIN CUTS
IRAN SAYS NO DISCUSSION TO RAISE CUTS VOLUME BEYOND 1.8M B/D
While oil prices had traded near session highs ahead of the leaked announcement, they have failed to spike on the news and in fact Brent is back under $64, suggesting that, as Goldman predicted, a favorable outcome had been more than priced in, and now the details of the agreement will determine which way oil moves next.
As Citi wrote moments before the report, “it looks like a 6-9 month extension is the most common expectation amongst OPEC members, though the inclusion of caveats is looking increasingly likely.
…click on the above link to read the rest of the article…
Issues, Problems, (Social) Media and the Manipulation Thereof
Back when I was knee high to a grasshopper the biggest issues I had were trying to avoid that jerk of a bully living across the street and making sure I returned home promptly when the street lights came on.
There was no wiggle room on the street light thing because a big bright street light had been placed by the town right outside the kitchen window, requested by mom…or so she claimed. Mom always knew when to expect the return of the wild ones and there would be hell to be paid if we were not home when expected.
Mom never believed us when we tried to explain not all street lights came on at the same time. With the twin benefits of hindsight and maturity I now realize she probably did, but knew if she allowed any wiggle room it would be instantly abused by the hellions. No self respecting dictator ever allows their authority to be questioned, especially by the serfs.
As I have now come to realize, thanks to Mrs. Cog teaching me her enlightened classification system, there are issues and there are problems. Both the terms and the ‘things’ are not interchangeable; not by a long shot.
Issues are always (relatively) minor and able to be resolved with the application of a little elbow grease and some determination. Most issues are often of our own making; therefore the solution is readily at hand.
Problems, on the other hand, are much more intractable and not as easily solved. If fact, problems are often deal breakers, bringing projects, negotiations and relationships to a full and complete stop.
…click on the above link to read the rest of the article…
“It Could Reshape The Global Trading System For Decades” – US Rejects China’s Bid “Market Economy” Status
The US has filed a legal submission to the WTO as a third party, intervening in a case that China has brought against the European Union. The US rejects China’s argument that under the 2001 agreement, which confirmed China’s WTO status, it would should automatically be considered a “market economy” fifteen years after joining. The dispute could affect both America’s and China’s future within the international body and, as the New York Times contends, “shape the global trading system for decades to come.” It goes without saying that this will only ratchet up the current tensions between the US and China over trade, which has been a cornerstone of Trump’s rhetoric since he launched his election campaign.
Briefly, the US submission sets out the legal arguments explaining why China should not be designated as a market economy, which would give it preferential treatment under existing WTO rules. China is currently designated a “nonmarket economy” which allows the US, EU and other countries to decide whether China is dumping products at unfair prices under a WTO framework. If they decide that China is dumping, countries can add an extra duty to protect domestic manufacturers.
According to the Financial Times, “the Trump administration has opposed China’s bid for recognition as a “market economy” in the World Trade Organization, citing decades of legal precedent and what it sees as signs the country is moving in the opposite direction under Xi Jinping. The US opposition to China’s efforts to be recognised as a market economy in the WTO came in a legal submission due to be released on Thursday in a case brought by Beijing against the EU. Market economy status would make it more difficult for the US to prove anti-dumping cases against Chinese companies at the WTO.”
…click on the above link to read the rest of the article…
Is Washington the Most Corrupt Government in History?
The man who died twice
Robert Mueller, a former director of the FBI who is working as a special prosecutor “investigating” a contrived hoax designed by the military/security complex and the DNC to destroy the Trump presidency, has yet to produce a scrap of evidence that Russiagate is anything but orchestrated fake news. As William Binney and other top experts have said, if there is evidence of Russiagate, the NSA would have it. No investigation would be necessary. So where is the evidence?
It is a revelation of how corrupt Washington is that a fake scandal is being investigated while a real scandal is not. The fake scandal is Trump’s Russiagate. The real scandal is Hillary Clinton’s uranium sale to Russia. No evidence for the former exists. Voluminous evidence for Hillary’s scandal lies in plain view. http://www.foxnews.com/opinion/2017/10/25/hillary-clinton-and-real-russian-collusion.html
Why are the clearly false charges against Trump being investigated and the clearly true charges against Hillary not being investigated? The answer is that Hillary with her hostility toward Russia and her denunciation of Russian President Putin as the “New Hitler” is not a threat to the budget and power of the US military/security complex, while Trump’s aim of normalizing relations with Russia would deprive the military/security complex of the “enemy” it requires to justify its massive budget and power.
Why hasn’t President Trump ordered the Justice Department to investigate Hillary? Is the answer that Trump is afraid the military/security complex will assassinate him? Why hasn’t the Justice Department undertaken the investigation on its own? Is the answer that Trump’s government is allied with his enemies?
…click on the above link to read the rest of the article…
On the Road to Oblivion: “Quality, Thy Antonym is Equality!”
“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”
― C.S. Lewis
On Thanksgiving eve, I was notified of a circumstance which caused me to drive thirteen hours round trip the following weekend. The event which precipitated my travels is now beside the point, but I will say, given prior commitments and work scheduling, I was compelled to go alone. I didn’t mind. So I booked my hotel located in a major American metropolis, and that Saturday, packed my bag, grabbed my toothbrush and car keys, and bid my bewitching bride fare-thee-well.
Rather than take my larger rig, I decided to drive something more compact for the city; and more fun. Soon, I was rolling over roads that were seemingly slung before me like waving ribbons in a whimsical wind. Although my material journey had just begun, mentally, I was already traveling down familiar, distant thoroughfares at the speed of thought; what The Grateful Dead would call the “West L.A. Fadeaway”: Little red light on the highway, big green light on the speedway, hey hey hey.
My coincidental cognitive cruise began with gratitude. If I were to align sonic bell curves to represent my personal automotive preferences, the car I was driving would percuss the pinnacle position of every measure. With just the right exterior dimensions, and the perfect amount of interior room, horsepower, safety, comfort, reliability, economy, and style, I am fortunate to own such a vehicle.
…click on the above link to read the rest of the article…
Bitcoin, Terence McKenna and the Future of the Internet
We have millions of people who are warehoused in almost a larval state in their apartments, watching tv, paying for their medical plans, and glued to this mindless opera of cultural decay that’s recited day after day in front of them. I mean, it’s horrible to imagine — and this is a creation to some degree of the world corporate state, that probably has to be addressed.
– Terence McKenna, The Internet is the Cure for TV (1994)
I know the title of this post seems strange in light of several factors. First, it’s been nearly twenty years since the dot-com bubble burst and it’s estimated that 3-4 billion people globally, or roughly 50% of the world’s population, already surf the web. Second, it’s become increasingly trendy in 2017 to highlight all the bad things about the internet, with social media typically singled out for the most intense and visceral criticism. Although I acknowledge some very real downsides of social media such as unhealthy obsession and addiction, most of the outrage we’ve seen this year has been focused on “fake news” and “Russia meddling.” In other words, most of the hysteria’s been political in nature, and would barely be registering anywhere near its current decibel level had Hillary Clinton won the election.
All of a sudden, there’s this insistence that social media is especially dangerous because it fosters the creation of echo chambers rife with tribal confirmation bias. Spaces where people with the same views simply talk to one another, and whoever’s willing to be the loudest and most aggressive at signaling to their tribe becomes the most popular. I don’t deny that this phenomenon exists, but like with anything else, you have to accept the bad with the good, and in the long-run the good far outweighs the bad.
…click on the above link to read the rest of the article…
US Gross National Debt Jumps $723 billion in 12 Weeks, Yellen “Very Worried about Sustainability of US Debt Trajectory”
But only a few lost souls in Congress care.
Even as lawmakers are trying to cobble together a tax-cut bill that would cut revenues by $1.5 trillion over ten years, the gross national debt has spiked $723 billion over the past 12 weeks since Congress suspended the “debt ceiling.” It just hit $20.57 trillion, or 105% of GDP.
Over the past six years, since November 2011, the gross national debt has surged nearly 40%, or by $5.8 trillion. Back in 2011, gross national debt amounted to 95% of GDP. Before the Financial Crisis, it was at 63% of GDP. There are no signs that the relentless rise in the debt is slowing down. On the contrary – the tax cuts are going to steepen the curve:
In the chart above, note the last three debt-ceiling fights – the flat lines in 2013, 2015, and 2017, followed each time by an enormous spike when the debt ceiling was lifted or suspended, and when the “extraordinary measures” with which the Treasury keeps the government afloat were reversed.
And the Fed is getting increasingly nervous about the “sustainability” of this debt.
There are only a few lawmakers left in Congress that have a sense of fiscal responsibility. One of the lost souls is Senator Bob Corker, a Republican from Tennessee, who, to address his anxieties about the deficit and the debt, wants to add a provision to the tax-cut bill that would raise taxes automatically if the economy doesn’t hit certain growth targets in the future. This “trigger” is designed to slow by a smidgen the relentless rise of the national debt. He has come under withering criticism for it from Republican lawmakers and conservative lobbying groups.
…click on the above link to read the rest of the article…
