12/29/2010

We Speak on Real News Network About Stimulus and Tax Cuts – Yves SmithStimulus and Tax Cuts Not a Long Term Solution

Rebound Redux – The Jevons Paradox is a special case of Jean-Baptiste Say’s Law of Markets, a cherished version of which has it that “Every labor-saving device creates in general as many, oftentimes more, jobs than it destroys…” You can’t “reject” Jevons without also repudiating Say. They’re joined at the hip. So will that reduced carbon footprint also be “jobless”? There is a way out of the dilemma, but it involves investigating the relationship between the Jevons Paradox and Say’s Law, not cherry-picking the parts you like and the parts you don’t. I discuss this relationship in Chapter 1 of Jobs, Liberty and the Bottom Line. See also What “lump of energy” fallacy? at Crooked Timber

Case Shiller House Prices: Which cities will hit post bubble lows next? – In the S&P/Case-Shiller report for October, S&P noted:  [S]ix markets – Atlanta, Charlotte, Miami, Portland (OR), Seattle and Tampa – hit their lowest levels since home prices started to fall in 2006 and 2007 S&P reports the data Not Seasonally Adjusted (NSA) because of concerns about foreclosures impacting the seasonal factor. Using the Seasonally Adjusted (SA) series, eleven cities were at post bubble lows; the six cities listed above plus Phoenix, Chicago, Detroit, New York and Las Vegas. The following graph shows the percent above the post bubble lows for the 20 Case-Shiller cities and the two composite indexes using both SA and NSA data. We can probably guess the cities that will set new post bubble lows in November. Using the NSA data, Las Vegas, New York and Detroit will all probably join the list above setting new lows. Using the SA data, Dallas, Cleveland, Denver, and maybe the Composite 20 index will be at new lows.

Pew Research News IQ Quiz – Pew Research

 

Can The Bank Just Change The Locks On My Home? – Today, all over this formerly great country of ours, there are gangs of thugs roaming through neighborhoods deciding what homes they want to break into.  I had two clients in my office today who were victims of the banks breaking into their home and it MAKES ME SO ANGRY I COULD SCREAM! They don’t have any Order from a judge or law enforcement that would give them the legal basis to forcibly break into any person’s home, but that doesn’t stop them. They claim not to have any idea that breaking into private property is not permitted by law and say that they are relying upon instructions from the banks who have taken over this country. What angers me most is if law enforcement responds to the call about these break ins, law enforcement will leave and frequently not even take a report….they determine that it is a civil matter and they leave…sometimes leaving a terrified homeowner fearful and unprotected because the thugs hired by the banks have convinced law enforcement that they are permitted to break into homes.  Often law enforcement believes this…I mean, after all, they’re the bank right?

The Consequence of a Shattered Safety Net: Return to the Poorhouse? – Ryan Grim and Arthur Delaney do the nation another excellent service today by examining what the world would be like without Social Security. It isn’t too hard to imagine – you just have to dive back into the pre-1930s history books. And you will see the world of the poorhouse, the last refuge for the elderly and the infirm, the farms run by private charities which provided a dour and often cruel existence for those on the edges of society. Grim and Delaney begin with a fitting example of someone bound for the poorhouse back in 1896

Future shock? Welcome to the new Middle Ages – Imagine a world with a strong China reshaping Asia; India confidently extending its reach from Africa to Indonesia; Islam spreading its influence; a Europe replete with crises of legitimacy; sovereign city-states holding wealth and driving innovation; and private mercenary armies, religious radicals and humanitarian bodies playing by their own rules as they compete for hearts, minds and wallets.  It sounds familiar today. But it was just as true slightly less than a millennium ago at the height of the Middle Ages. In recent years it has become conventional wisdom that the post-cold-war world will see rising powers such as China and Brazil create what international relations experts call a “multi-polar” order. Yet for the next 10 or 20 years, it is not at all clear that the future many imagine will come to pass – namely that the relative US decline will continue, Europe will muddle along, China and India will grow ever stronger, and other straight-line projections. In fact, the world we are moving into in 2011 is one not just with many more prominent nations, but one with numerous centres of power in other ways. It is, in short, a neo-medieval world. The 21st century will resemble nothing more than the 12th century

 Illegal Rare Earth Mines Face Crackdown – China’s national and provincial governments [have started] to crack down on the illegal mines, to which local authorities have long turned a blind eye. The efforts coincide with a decision by Beijing to reduce legal exports as well, including an announcement by China’s commerce ministry on Tuesday that export quotas for all rare earth metals will be 35 percent lower in the early months of next year than in the first half of this year.Rogue operations in southern China produce an estimated half of the world’s supply of heavy rare earths, which are the most valuable kinds of rare earth metals. Heavy rare earths are increasingly vital to the global manufacture of a range of high-technology products — including iPhones, BlackBerrys, flat-panel televisions, lasers, hybrid cars and wind-power turbines, as well as a lot of military hardware. The gangs have terrorized villagers who dare to complain about the many tons of sulfuric acid and other chemicals being dumped into streambeds during the processing of ore. Illegal rare earth mining and chemical runoff have poisoned thousands of acres of prime farmland, according to the government of Guangdong Province, and have been blamed for many illnesses.

China’s rare earths export cut spurs trade concerns – China’s move to slash export quotas on rare earth minerals — vital in a slew of high-tech products — has raised fresh international trade concerns, and Japan’s Sony Corp vowed on Wednesday to reduce its reliance on the minerals. China, which produces about 97 percent of the global supply of rare earth minerals, cut its export quotas by 35 percent for the first half of 2011 versus a year ago, saying it wanted to preserve ample reserves. It also cautioned that it has not decided on the quotas for the second half of the year. The little-known class of 17 related elements is used in numerous electronic devices and clean energy technology. Sony, maker of Bravia brand flat TVs, Vaio PCs and the PlayStation 3 videogame console, will look for ways to cut its use of rare earth elements, including developing alternative materials, Iguchi said.

America’s revival begins in its cities – Reinvention requires a new wave of innovation and entrepreneurship, which can emerge from our dense metropolitan areas and their skilled residents. America must stop treating its cities as ugly stepchildren, and should instead cherish them as the engines that power our economy. America’s 12 largest metropolitan areas collectively produced 37 percent of the country’s output in 2008, the last year with available data. Per capita productivity was particularly high in large, skilled areas such as Boston, where output per person was 39 percent higher than the nation’s metropolitan average. New York and San Francisco enjoy similar per capita productivity advantages. Boston also seems to be moving past the current recession, with an unemployment rate well below the national average of 9.8 percent. For decades, the American dream has meant white picket fences and endless suburbs. But the ideas created in dense metropolitan areas power American productivity. We should reduce the pro-homeownership bias of housing policies, such as the home mortgage interest deduction, which subsidize suburban sprawl and penalize cities. We should rethink infrastructure policies that encourage Americans to move to lower-density environments. Most importantly, we should invest and innovate more in education, because human capital is the ultimate source of both urban and national strength.

A stunning year in climate science reveals that human civilization is on the precipice – The last year or so has seen more scientific papers and presentations that raise the genuine prospect of catastrophe (if we stay on our current emissions path) that I can recall seeing in any other year. Perhaps the media would have ignored that science anyway, but Climategate appears to be a key reason “less than 10 percent of the news articles written about last year’s climate summit in Copenhagen dealt primarily with the science of climate change, a study showed on Monday.” But for those interested in the real climate science story of the past year, let’s review a couple dozen studies of the most important findings.  Any one of these would be cause for action — and combined they vindicate the final sentence of Elizabeth Kolbert’s  Field Notes from a Catastrophe:  “It may seem impossible to imagine that a technologically advanced society could choose, in essence, to destroy itself, but that is what we are now in the process of doing.”

Fresh Crises Loom in Europe and the U.S. – Simon Johnson – Most experienced watchers of the euro zone are expecting another serious crisis in early 2011, tied to the rollover funding needs of its weaker governments. With debts coming due from March through May, the crisis seems much more predictable than what happened to Greece or Ireland in 2010. And the investment bankers who fell over themselves to lend to these countries on the way up now lead the way in talking up the prospects for a serious crisis. This situation is not more preventable for being predictable, because its resolution will involve politically costly steps – which, given how Europe works, can be taken only under duress. Don’t smile at the thought and think, “It can’t happen here,” because this same logic points directly to a deep and morally disturbing crisis in the United States.

The euro: where we are at – Wolfgang Munchau writes: The EFSF will expire in 2013, at which point a new, tougher crisis regime will kick in. The EU has chosen this particular two-step construction for mainly political reasons, but from a funding perspective it is a nightmare. All existing bondholders will be protected until 2013. All government bonds issued from 2013 onwards will have collective action clauses. This means that if a government cannot service the debt, it can agree a haircut with a majority of investors – with legal force for all investors, including those who disagree with the majority vote. Looking at it from a risk-management perspective, this means that the entire default risk of the eurozone periphery will be concentrated on post-2013 bond issues. No one in their right mind would buy such junk bonds.

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