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As far as the rest of the world goes, I am interested in all of the renewed talk of a bad bank which is eminating from TPTB. My thinking goes, why do they need to make a bad bank when we already have hundreds of them? Why not make a good bankand pump it full of what is left in the TARP? True this will basically wipe out a lot of the equity positions taken with the first $350 billion of TARP as many of the zombie banks go under or restructure. But, continually dumping money into institutions that are fundamentally flawed (like most of the bigger banks) won’t fix the problem, it will just put all of the risk in the hands of the government. Much like my live and let die point of view regarding the auto industry, I say let the banks sink or learn to swim in the new pool. This will probably mean a lot of hardship, but it is the only logical way out IMO and all of the stuff the government wants to do is just stretching the hardship out over a longer period of time.

So, create a good bank with the $350 billion and use it to finance sustainable economic development. I won’t hold my breath, but I do think it is a good idea. BTW, it was originally Robert Reich’s idea, before he got in bed with O’s economic teams status quo approach. Interestingly, I can’t find the post about the good bank idea in his blog. Maybe he changed his mind… Here’s Peter Schiff, at least one guy that has not changed his mind:

Climate Change largely irreversible for the next 1000 years

When are people going to realize that climate is not something you can control or manage. The climate of the earth has naturally fluctuated throughout history. I won’t argue with the findings of this report though, if they just admit that even though we are pumping pollution into the climate, we don’t know how to change it back or keep it at some livable level indefinitely. The human race isn’t that talented. We are kind of like a curious kid, we can break something but we can’t fix it.

Future Farming

“We live off of what comes out of the soil, not what’s in the bank,” said Jackson, president of The Land Institute. “If we squander the ecological capital of the soil, the capital on paper won’t much matter.”

The Pit of Despair

Word!

Because as monetary velocity approaches zero—in other words, as none of the cash that the FED is printing or giving to banks circulates—we spiral more precipitously into a deflationary twist-and-shout. Even though stuff may “look” cheaper (i.e. gas at the pump), the crashing money supply (and availability of credit) means that gas may be cheaper, but in relationship to what I’ve got in my wallet it’s much more expensive.

Big banks have failed. The solution? Big banks …

People around the world get it, so why does the fact that there are more and more people onto the government schemes not change anything?

Peak Oil and the Global Economy

He is a smart guy so I will just let him go at it:

The global economy will collapse in 2009, resulting in the worst recession in the post WW II period. The commercial real estate sector is highly leveraged and will collapse beginning in late February or early March as major retailers fail, leaving vacant rental space that will not be filled. This will lead to further failures in the finance and banking sectors and higher unemployment which is at 13% and growing.

Some two-thirds of the U.S. economy is based on consumerism, which is declining rapidly due to increasing unemployment. Declining personal income means a shrinking tax base and a need to raise state, local, and federal taxes and user fees.

This economic collapse, Celente believes, will lead to the “Greatest Depression,” more corporate fraud, increased street crime, taxpayer revolts, rioting, and revolution. Survival is now a real concept as people lose investments and jobs. A return to frugality and self-sufficiency will characterize the economy in years to come.

Sun Power: Kickstarting Solar-Hybrid Power Plants

Bailout News Stimulus Edition: Generational Rape with a trillion dollar Shovel

Advice to Obama from The Oil Drum

There is a lot of information worth reading in this. If you like reading, check it out…

The Peak Oil Crisis: The Stimulus

This would seem to leave little doubt that the President understands what could turn out to be the two biggest problems of coming decades – dependence on oil and global warming. There is much in the current stimulus plan and other administration initiatives that seem to make sense – increasing renewable fuels, $31 billion towards improving the electric grid, $37 billion to weatherize government buildings and low-income homes, $10 billion to improve public transit and railroads. All this of course is only a small fraction of the $900 billion proposal. The rest seems to be directed towards offsetting the effects of the economic down turn, helping the unemployed and hopefully stimulating what some believe will be an economic rebound. Some parts of the bill, however, such as the $31 billion for repairing and building roads seem downright wasteful given that vehicular traffic has no place to go but down.

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I had thought there would be a rebound rally in the first half of the year, but now I doubt it. I think that the real economic news is just going to be too bad and equities will probably stay anchored to something like their current levels through the first half of the year. Maybe 2009 will turn out to be a total non-event for investment indicators. I still think we are screwed, but it seems like the transparency of the screwing we are going to take this year won’t be so clear.

I tried to post the following text as a reply to “Who’s going to pay the national debt?”, but the site wouldn’t let me comment yet. It is a good post that does a decent job of explaining the national debt from a republican perspective:

The original post points the finger at democrats when republicans are just as bad about deficit spending (last 8 years are an excellent example).

I also don’t necessarily believe that the trust funds are worthless yet. If the economy can recover, I think the most likely scenario will be that they sell public bonds to replace the GAS holdings in the trust funds as payroll receipts come due. What I wish they would do is stop paying interest on the the trust funds. Last year $212 billion was “spent” on interest payments on GAS. That is stupid (and yet another Greenspan creation).

A lot of this problem can be traced back to the Greenspan commission in the early 80’s. Their trick was to raise the payroll taxes to unnecessarily high levels in order to cut other taxes without increasing the public debt. It was a bookkeeping loophole that screwed working people some and small businesses a ton (because if you are independent, you have to pay both shares on your income).

My guess is a lot of this isn’t going to matter anyway. The Obama Administration will continue the Bush Administration policies (run huge deficits, continue to dump money into zombie companies) and crash the dollar in the process in order to paper over 20+ years of Greenspan debacles. On the other side, the debt will irrelevant because our economy will be in shambles.

O receives 2 week notice to change

Since I am currently unemployed and dependent on my girlfriend who has 1 week of seniority, I hope this is wrong. However, it is deeply disconcerting to think about things this way. Ilargi has my daily attention.

Mexican Oil output at 60 year low

You may be thinking, “thank goodness I’m not Mexican” but this will have a huge impact on the US too. If production continues to decline (and the price collapse won’t help inject funds) Mexico’s problems will become America’s problems as well since we share a porous border, they send us a lot of oil and the legitimacy of their government is underwritten by their national oil company. To paraphrase KRS-One, Mexico, now your FUCKED.

US financial losses may reach $3.6 trillion

Once the numbers get that big, there is no keeping the system going. Because the numbers are that big, the system is going to change dramatically. Of course, Washington will be there to protect the interests of the vested elite. O or W, doesn’t matter. Meet the new boss, same as the old…

Living Lightly

First, let me say that I could care less about my carbon footprint. I care about two things when it comes to stuff like this.

1. Where do my energy and water come from?

2. How much do they cost?

On this basis alone, I think things like composting toilets, air-drying your clothes and increasing your energy efficiency make sense. Plus, it is weird and fun, so that makes it good too.

Escape from Suburbia

The title is certainly catchy, but I will have to wait until I see it before giving it a thumbs up or down. It is on Netflix for streaming though, so I will watch it soon!

Secessionism and peak oil

We live in an age that encompasses a colossal contradiction. On the one hand, there is the corporatist and technocratic thrust for globalization and a professed New World Order. On the other hand, there is the interrelated dynamic of empire collapse. Both tendencies stem from a diminishing supply of and access to cheap energy resources as evidenced by the imminent arrival of Peak Oil.

Peak oil activist and the coming culture change

The unpleasant truth of US society’s waste and excess has been widely known since the 1960s, when the “Sixties Movement” meant lifestyle change more than mere politicking. Awareness of stifling consumerism and materialism spurred a rejection of “plastic society” as articulated by popular avant-garde artists. This era of awareness peaked around 1970. Energy and environment were not hot topics compared to the US war on the Indochinese. But some of us made note of the fact that the bombers and naval ships were all running on lots of oil. This was not considered a “news” item, when other issues and passions raged.

Forget Peak Oil

The logic of the person interviewed goes that peak oil doesn’t matter because OECD (rich, mostly white countries) demand has probably peaked and global warming regulations will further decrease demand. Then, the reporter interviews an oil exec that says OECD demand doesn’t matter because the Global South was leading the spike in demand prior to the credit collapse. This leads me to the question, what the fuck is the first guy talking about?

The solution to our financial crisis

This post (complete with 3.5 hour video) talks about the idea of abolishing the Fed and issuing debt free notes (new paper currency) to pay off the national debt. I have not watched the video, and I have never heard of the idea but it seems interesting…

A pork Orchard

“For more than 40 years now, Sepp Holzer, the agricultural rebel has been transforming his family farm in the Lungau district in the Austrian Alps into an eco-paradise of fishing ponds, ten thousands of fruit trees, shrubs, vines and highly productive vegetables and herbs. Here, at an altitude of 1500 meters (~5000 feet) in the “Siberia of Austria”, he has created a self-sustaining landscape in which he produces many varieties of the best quality fish, fruits, nuts, vegetables, mushrooms, pork, poultry and even citrus without irrigation, fertilizers, pesticides or weeding.

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Here is John Micheal Greer interviewed last year by peak moment that I thought was interesting:

American taxes and labor are too expensive to build anything

This is ridiculous. If you give business assholes an opportunity to whine, they will seize on it. I don’t think there should be any corporate taxes at all, so I agree with that part of it. But I am sure you can find plenty of qualified people to build whatever you want them to build if you treat them half way decent and pay them enough to survive.

Hedge fund insiders turn into doomers

At least one insider getting ready for impending doom:

During the final months of 2008, as the financial markets imploded, talk on trading desks turned to food and water stockpiles, generators, guns, and high-speed inflatable boats. “The system really was about six hours from failing,” says Gene Lange, a manager at a midtown hedge fund, referring to the week in September when Lehman went bust and AIG had to be bailed out. “When you think about how close we were to the precipice, I don’t think it necessarily makes a guy crazy to prepare for the potential worst-case scenario.”

Preparations, in Lange’s case, include a storeroom in his basement in New Jersey stacked high with enough food, water, diapers, and other necessities to last his family six months; a biometric safe to hold his guns; and a 1985 ex-military Chevy K5 Blazer that runs on diesel and is currently being retrofitted for off-road travel. He has also entertained the idea of putting an inflatable speedboat in a storage unit on the West Side, so he could get off the island quickly, and is currently considering purchasing a remote farm where he could hunker down. “If there’s a financial-system breakdown, it could take a year to reset the system, and in that time, what’s going to happen?” asks Lange. If New York turns into a scene out of I Am Legend, he wants to be ready.

We’re Screwed, figure out how you can survive

Mexico and Pakistan are in danger

This is a 25 year forecast, I don’t think you need to go that far out for Mexico to deteriorate. Pakistan is going to be worth watching…

$200 Oil

The idea here, which I agree with is once demand comes around the price will spike again once the gluts get eaten through.

US to default on debt

A somewhat simple forum post, but kind of cool that there are people out there thinking like this.

Now what?

That’s what. Actually I say make friends with people that know something valuable, or hire them if you are rich. Otherwise try to keep possibilities open, don’t spend too much time, energy, money over-specializing in something that is frivolous.

Big 3 will need help to go electric

Never mind that the vast majority of Americans are not interested in electric cars, Detroit needs money to build them. I hope gas hits 79 cents in the spring or fall and GM finally creeps to a halt and gets sold off.

Here is an interesting quote not directly related to the main thrust of the story (emphasis added):

“There’s an inherent braking mechanism on our economy that’s tied to oil and will limit our economic growth,” said Deutsche Bank analyst Rod Lache. “This is one of the reasons we’re bullish on electrification of the industry.”

Visualizing government debt

This is a cool (and very pretty) expression of government debt.

Stewart Udall’s letter to his grandchildren

I call Stewart’s generation the worst generation because they took the temporary affluence of post WWII and pissed it away on car culture and suburban expansion. Here is one of the better members of the worst generation, apologizing:

Operating on the assumption that energy would be both cheap and superabundant, I admit, led my generation to make misjudgments that have come back and now haunt and perplex your generation. We designed cities, buildings, and a national system of transportation that were inefficient and extravagant. Now, the paramount task of your generation will be to correct those mistakes with an efficient infrastructure that respects the limitations of our environment to keep up with damages we are causing.

Peak Phosphorus

Our ability to provide enough food to feed the human population is dependent on the use of artificial fertilizers, which contain nitrogen and phosphorus. While nitrogen is abundant in the atmosphere, phosphorus is mined at just a handful of locations worldwide.

The natural resources are limited and are being depleted.

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1. The Afghani EPA’s struggle with air quality in Kabul

2. A Sri Lankan Journalist that published a suicide letter stating that the government was going to kill him. Then, on queue, the government killed him.

I like NPR because they cover stuff I would not otherwise find out about, but both of these stories seemed so trivial to me. Don’t get me wrong, but they are both depressing, but think about it. Why does a failed state that has an economy based on foreign aid and heroin profits need to worry about air quality? Maybe, just maybe, focus in on bringing the country together and developing some food security and economic base. Then address the air issues. I know the “walk and chew gum” saying, but they are so terrible at walking, why even bother to chew gum?

I realize that a journalist standing up for what they believe in is supposed to be heroic, but it just seems like a waste to me. If I had a job, and I knew that just by doing that job I would get killed, I would quit. I think that is a major difference between me and guys like the journalist – Lasantha Wickrematunge. I don’t think there is anything wrong with fighting for something, but what was he fighting for? A better Sri Lanka? Seriously? I don’t even think there is hope for the US which has a number of advantages over Sri Lanka. You will not ever see me write something like this:

“When finally I am killed, it will be the government that kills me.”

First, I am too selfish. Second, I am not so impressed with humanity that I would want to let myself get killed because other people are getting killed.

That was a real spiritual boost huh? To take some of the edge off, enjoy this little interlude before the regurgitation resumes.

Nate Hagens (of theoildrum.com) has advice for Barack

I think a lot of these letters to the president-elect are vanity exercises, but they are not all fruitless. Here is a juicy tidbit from Nate Hagens’ letter to the big O:

Our species in general and Americans in particular have the wiring and drive to be consumptive machines. No matter how many goods we acquire over time, our pecuniary desires seem to increase faster than our acquisitions. Combine this with our mirror neurons(video), between-and-within-nation aspiration gaps (based on biologic underpinnings of relative fitness), an evolutionary penchant for waste, a built in drive to outcompete, a culture that fosters keeping up with the Joneses with a high % of Veblen goods, and you get a frenetic feedback loop that has a vast plurality of Americans now Jonesing, many nearly broke, obese, and a fair number realizing, without knowing the details, that something is amiss. Alternative measures of ‘keeping score’ other than GDP concur that we are losing ground. Fortunately, subjective well being studies show we are equally happy as the average Phillipino, yet use 39 times the primary energy. This I view (as should you) as a great opportunity. In the end, humans are ‘adaptation-executors’, not utility maximizers. (This is really an ace in the hole – because the economic ‘utility’ machine is not needed to make us happy).

Facing our bigger problems requires that we individually and collectively become better able to consider and more heavily weight the future vis-a-vis the present. However, recent research suggests that addicts, and many other social groups (including men), have steeper discount rates – less able to access longer term thinking and action. Furthermore, there are numerous cognitive biases, ideological immunity (the Planck Problem), and belief systems that stand in the way of change.

Renovating Suburbia

I always get knocked for being so pessimistic and cynical. Well, here is a Tom Whipple editorial full of sunshine which I will relay and not doom out. I actually agree this may be what life will look like once things all shake out. Here’s a taste:

To maximize efficiency, the concept of a “store” that contains a large inventory could be replaced by warehouses for goods ordered over the internet and delivered to neighborhood centers. These centers could serve as starting points for public transit vehicles that could provide frequent service to move people as well goods to and from the neighborhood centers. They could even supply personal services such as haircuts and dentists. By combining the movement of mail, people and goods on one frequent-service, efficient electric vehicle great energy efficiencies could be achieved.

Former Oil Co CEO (a Canadian one though) tips hat to PO

Outside of Mormons, I think Canadians are probably some of the nicest people on earth. That is probably why a CEO of a Canadian oil company is willing to say something like this:

“Black oil has peaked,” he said in telephone interview this week. “The biggest oilfields in the world have been producing for 50 years and they’re all getting tired.”

He says no giant oilfield, capable of replacing those in Saudi Arabia, Iraq or Kuwait that produce more than half-a-million barrels a day, has been discovered and developed since the 1970s.

That fact, coupled with rising demand means”we’re going to need a new Saudi Arabia” to sustain existing reserves into the future.

He calls the current recession a mere “hiccup”on the road to much higher energy prices.

Once it’s over, in 18 months or so, he says the pressure on oil supply and demand will “snap back higher, and stronger than before.”

“If Exxon comes out and says, ‘Sorry guys, the oil production rate is not going to go up, this is it,’ there’d be hell to pay (from investors). So they’re better off just zipping their lips.”

Toyota, Peak Oil and You

At least there is one big company that is willing to mention peak oil without denouncing it. I realize they are playing up their electric tech, but it is still interesting. Someone needs to get this on O’s Blackberry…

Ukrainian stability and independence on the chopping block?

Not necessarily something that is on my personal radar, but it is interesting to watch how Russia plays with its neighbors and their gas supplies now that they are past their second peak in oil – at a time when the bottom has fallen out of the oil price barrel. I am glad I am not a European, and particularly glad I am not Ukrainian…

Pakistan watch

If you are interested in South Asian affairs, then the following should give you a nice pick me up and some warm fuzzies:

Thus, what awaits President-elect Obama on his inauguration next Tuesday is a Pakistan that is home to and a hot bed for recruitment for an unrepentant Osama Bin Laden and a reconstituted Al-Qaeda and Taliban; a government that is confronted by an increasingly aggressive Islamic revivalist movement; unable to exert meaningful control over significant portions of its territory; uneasily eyeing improved relations with historic patron China as a hedge against America’s growing disillusionment; fearful of a possible military coup; doubtful of its ability to control its own intelligence and security apparatus and though nuclear armed, is conventionally disadvantaged should tensions between itself and India erupt into war. Adding to this volatile situation is Pakistani and American fears should war erupt between the two decades long antagonists.

Investment assholes have senses of humor too

You might have to consume business media to get some of these. I liked the one below because Matt Simmons is an anomaly in peak oil. He is a banker who only invests in energy plays and was on the super secret Dick Cheney energy task force at the beginning of the Bush era. Not exactly the person you expect to talk about peak oil. Anyway, I thought this was funny:

After hiding out for months during the Energy Bear market, Matt Simmons is finally located in Carthage, Illinois and beaten by a crowd of angry peak oil enthusiasts. He is quoted as being “flabbergasted” by his treatment by the mob.

Kissinger’s New World Order

Really? I wonder if they write stuff like this to get guys like Alex Jones worked up? I don’t like anything about Kissinger, I think at best he is a scumbag and at worst he is part of the NWO master plan. It does creep me out a little bit to see something like this on a mainstream website (emphasis added):

Even the most affluent countries will confront shrinking resources. Each will have to redefine its national priorities. An international order will emerge if a system of compatible priorities comes into being. It will fragment disastrously if the various priorities cannot be reconciled.

I am not 100% on board with the NWO theory, but seeing something like this does get my attention.

Jim Rogers and Peak Oil

If you don’t know Jim Rogers, he got rich with George Soros betting against the pound. He has since moved to China but does a lot of business media punditry. I never noticed him dancing around with peak oil stuff before, but it caught my eye. If he is on board with this kind of thinking, wtf is he doing in China.

Almost half of Energy CFO’s say we are at peak

I don’t know why I find establishment acknowledging something I think is true so much. If you knew me, you wouldn’t think I would need validation from 48% of CFO’s, but it turns out I do. And they agree, at least 48% of them do. There, I feel better already. What is a CFO again? Is that one of those curly little light bulbs?

Let’s hope Hirsch is wrong

Hirsch is Robert Hirsch, he wrote the Hirsch report. Look it up sometime. The writer is looking for a silver lining but doesn’t realize we will not have the market push to transition the economy in time…

This is a grace period, useful if we make good use of the time. If we squander it, we might find ourselves in more poorly prepared foe peak oil than if the recession had never happened.

You can guess where I think we will find ourselves.

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