World News (Wed 31st. Aug ’11)

  By Mystic | August 30, 2011 - 11:48 |

Turn to the right….three, four
Turn to the left….three, four
Turn around….Do it again….and never ask
what you’re turning for.
[audio:http://overthepeak.com/wordpress/wp-content/uploads/2011/08/WN-Wed31Aug-11.mp3|titles=WN Wed31Aug '11]

Play

Podcast: Play in new window | Download

Written by: Mystic on August 30, 2011.
Pages: 1 2
Bookmark the permalink.
  • James

    They consider to collateralize the EFSF aid by ‘forced’ nationalized bank shares. The private sector forced reply is to merge their banks and also ‘accept’ vulture Countries first aid( who aim to increase %, long term). hope that helped.

  • Stevo

    Thrift can be another word for efficiency.  Just finished reading The End Of Shareholder Value which emphasizes te drive since the 1970′s by companies to deliver higher short-term share prices at the expense of their relationships with employees, suppliers, governments and consumers.  And perhaps this drive for efficiencies has exacerbated the decline in western economies and the need to borrow more.

    There was a France 24 news report and debate today discussing taxing the rich.  They said that 1 in 8 French people were below the poverty line of 985 Euros a month.

  • CSArichardo

    Great day in review !  

    The Manulife Financial Corp surprised stock holders back in 2008 by replacing their CEO and then cutting their dividend in half to build up their capital.  That is they were still making “great profits” but just diverted them for internal use.  You can just figure what happened to their stock !  Symbol is MFC in Toronto.   What the IMF boss is saying is not good for shareholders who need dividend income and cannot ride out the bank stock collapse while equity gets built back up over a number of years. I guess we need to avoid banks ?

  • Ray

    We already went through this bilge in the US with the banks, so let me tell you how it’s going to work. It’s not about “recapitalization” at all, it’s about decapitation. They’ll probably throw a big bank or two to the wolves to drive the point home. Then they will force the remaining big banks to buy their own debt. That’s what it’s all about, control of the bank’s capital by the state.

    The whole capital liberalization movement since the 30s was encouraged by government. That’s over! Not only that, but now the opposite is under way. It’s called repression. Get used to it; in the US we’re already used to it by now.

    This issue has no economic nor any financial solution that can alleviate it. It only has a political solution, one that will force governments to face reality, instead of playing power games to delay the inevitable.

  • http://www.regional-communities.com Tom Christoffel

    Thrift is a virtue. What was featured is the consequences of lack of thrift and a lack of sense. For the true consequences of over-indebtedness to be considered a Paradox of Thrift is a misuse of that term. It is a true paradox in societies that over-save, not ones that over-spend with credit.

    Though many of the nouveau riche will be hurt by austerity, the dynastic long money will gain greater control. Depression is the best time to accumulate assets. That’s what Carroll Quigley revealed in  “Tragedy and Hope” The real rich won’t be hurt

    Full document at this link – it split first attempt – so you may have to piece it together.
    http://www.alexanderhamiltoninstitute.org/lp/Hancock/CD-ROMS/GlobalFederation%5CWorld%20Trade%20Federation%20-%2098%20-%20Tragedy%20and%20Hope.html

    None of what has happened makes sense. Another perspective is offered by Naomi Klein in “The Shock Doctrine: The Rise of  Disaster Capitalism” I thought it was just about the neo-cons and the Iraq invasion, but the it goes deeper. The neo-liberal economic view that all profit is good is a distortion of human values, but they don’t see that. Disaster is an industry. As long as there are protected “green zones” for the monied, they don’t care about the “red zones” of austerity. Ultimately it should not work, but it may.  

    So, we have a variety of dysfunctional players whose wealth makes them right. The earthly golden rule of the Wild Wild West: “thems that got the gold make the rules.”

    We can understand charts, but they are a rear view mirror. The Paradox of debt? You feel good until you don’t?

    • James

      (Interesting non-ending read-link.)

      I think austerity complexity varies on each case. It can be seen as a transfer of wealth, not the rich getting richer mantra.
      “Got the Gold makes the rules”, cannot argue there, but the ‘owners’ of “Gold” dynamically change, maybe of luck, maybe of ability, maybe of the timing, maybe of the right place at the right time…but the dysfunctional players will cease to exist.

      Paradox of debt ? I think there should not be a paradox of such thing, when we already know that over indebtedness is an illusory technique for funding liabilities, a drug that kills the patient when overdosed. Are drugs, a paradox ?

      • James

        The bankers are closing their businesses in the West, and are moving to
        China, Asia and emerging markets. They
        follow the trend. They do not make the trend. “Gold” seeks its owner, not the other way around. Its how nature works, imo.

        • http://www.regional-communities.com Tom Christoffel

          Thrift is an austerity mind set. It dampens and can smother optimism. Anyone with parents who lived through the depression heard the real life stories. My mother is 86 and I still get them. She can’t imagine how people could have so little sense to get in such debt. Optimism and easy credit, plus a 401 (k) that was in growth mode gave the “wealth effect” that made it even easier to take on more debt and feel even wealthier.

          So here we are. It seems like all the good solutions exist in the past. Cash accounting, rather than balance sheet accounting, would have been a better choice. Optimism easily becomes lying and then there’s “gambling for redemption” as Roubini  called it or the “Hail Mary pass” of American football.

          At the personal scale, those of us with a constant scan of the economic environment, benefiting from the global view Nick provides, are likely to be able to navigate the great waves of change and survive, but what about our communities and societies?

          Got the (Gold/money/wealth) Power makes the rules. Enforcing the rules is the next challenge. Are the rules fair?

          IMO it is about Power. In nature there is no need for money. Organisms take what they can to meet their survival needs. That was in play when our economic system was hunting and gathering. Strength/violence was currency.

          I imagine that community emerged in humans to manage violence and limit loss of living members. The tribal/clan chief/warlord system added stability. Taking from other tribes, fine.

          So this early self governance is necessary to manage the “taking or violence/power economy. It is quaintly referred to as the “gift economy.” In order to give, one must have. That comes from power, mental a well as physical. Humans are not born with it, but we have the potential to gain some if our bodies survive, our minds are educated and we learn to navigate within the community/mental/social environments we encounter. This I posit as the “community motive” which is the primary method by which life solves problems and perpetuates.

          We give allegiance, our personal sovereignty, to community/society and organize government to manage violence/protect us from violence, both internal and external defense. As infants, this is done for us by family. Allegiance today is fragmented. Any time you have a vote, it is an indicator of some use of sovereignty. Individuals can withhold allegiance or be unaware of the choice. As an American with a “we the people” mindset, I feel that I am not separate from the government, though I must practice civil obedience to get the benefits. Because government has power, those entrusted with its conduct must obey the law as well and not misuse power.

          This I offer as a perhaps more realistic view of the governmental systems human communities have created to manage power/violence. 

          Economic powers, we know, can use governments to their advantage.  They have, it seems, more sovereignty than the average person and use their Gold/Money/Power to get more, playing both sides – government and private.

          They are driven by the “profit motive” which is deemed good, but when not been balanced by the “community motive,” a return to violence/oppression is the result for the greater community.

          Since this is an experimental planet, it is up to us to adapt and evolve. Spiritual guidance evolves as well, but it is up to Humanity to self-manage to perpetuate. Feedback indicates that systems are not functioning as expected. Its likely that expectations are dysfunctional. 

          • James

            Drugs have an instruction sheet that state, that over 5 per day can cause adverse effects, but people still overdose and eventually die.
            Yes, its the thirst about power, that eventually cause the demise. Life is not linear. Trying to make it, will cause more harm. It goes up, it goes down, you learn and expand. Wars are being replaced by ‘money’ wars. Personal motive, which always comes first, paves the way for the community gain, when based on a set of rules and laws. Global capital and people, are attracted by this set of rules. Life is not based on fairness, but it encapsulates it.

          • James

            “At the personal scale, those of us with a constant scan of the economic
            environment, benefiting from the global view Nick provides, are likely
            to be able to navigate the great waves of change and survive, but what
            about our communities and societies?”

            Not all people ups and downs, coincide.( its not about scanning and viewing , but that happens to be, it looks so ). Life is not monolithic.

            • http://overthepeak.com/wordpress/ Mystic

              (Please excuse me butting in here…..but…)
              Hello James,
              I am in no way saying you are wrong, but would like to stress something that has bee a revelation thought to me recently……..and that is that we are probably now globally linked.

              I would say that has been more technology, rather than global trade; has now, for first time ever, knitted the world together.
              The start of this recession (2008) was probably knitted, but not as tightly knitted as it knitted now.

              I think this next dip is going to show that the `world is now one`.

              It is going to bring together G Everyone to try and sort it out (but of course they will fail), but it will bring the idea of Global Government onto the front pages.

              Global zones just will not cut it.
              Global government is impossible.

              The only choice will be (and it won’t be a choice) to shrink back into countries and then watch the countries break up into smaller `units`.

              Peak……..?

              • James

                (nice you butting in….)

                Maybe, but of course time horizon is the unknown. Transferring of Power seems to be the case now, after maybe the Global thing may be the case, for how long…

                My point above was that not everybody’s peak coincide(cannot be), as of all people(not different countries), and maybe that’s a hope..
                what is an individual’s peak ?

  • Guest

    The steps outlined in 5b look a lot like the advice Dave Ramsey gives out – he’s always telling folks to buy old used cars. 

  • James

    “Give Karl Marx a Chance to Save the World Economy”

    This has to be idiotic nonsense.

  • Windcutter

    You WILL pay your debt.
    http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8732205/Banks-to-tell-families-cut-back-or-face-losing-your-home.html“More than 30,000 home owners will be told to spend less on nights out, Sky television, gym membership and mobile phones so they can concentrate on paying back their mortgage”
    Oh! Oh! Oh!

    And woe betide if you declare your income above what you tell the tax man.

    http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8732253/HMRC-to-verify-mortgage-applications.html

    They should have brought that in years ago, and they should make it compulsory that the banks send the applications to the taxman. 

    “The Mortgage Verification Scheme, which comes into force from today, means that lenders can choose to pass on applicants’ details to HMRC for additional checking. If they don’t match what is written on their tax returns, they could face an investigation”

    All those ‘liar loans’ were outright fraud. So let’s charge the bastards tax on their self-certified overstated income. And make it retrospective. And no, it s NOT a bloody right to commit fraud it is a criminal offence.

    Frigging debt.

    http://www.telegraph.co.uk/finance/economics/8731819/UK-debt-levels-damaging-growth-warns-BIS.html

    The original paper you can download here, but its a bit hard going in many places, although a couple of graphs and the synopsis will give you the picture.

    “At moderate levels, debt improves welfare and can enhance growth. But high levels can be damaging. When does the level of debt go from good to bad? We address this question using a new dataset that includes the level of government, non-financial corporate and household debt in 18 OECD countries from 1980 to 2010. Our results support the view that, beyond a certain level, debt is bad for growth. For government debt, the threshold is in the range of 80 to 100% of GDP. The immediate implication is that countries with high debt must act quickly and decisively to address their fiscal problems. The longer-term lesson is that, to build the fiscal buffer required to address extraordinary events, governments should keep debt well below the estimated thresholds. Up to a point, corporate and household debt can be good for growth. But when corporate debt goes beyond 90% of GDP, our results suggest that it becomes a drag on growth. And for household debt, we report a threshold around 85% of GDP, although the impact is very imprecisely estimated”

    http://www.bis.org/publ/othp16.pdf

    But what is missing is tying in the analysis with the monetary system, which requires a constant ramping up of debt. Go the graph 1, around page 6, which shows a constant annual growth in debt of 3% to 4% across the whole of the 18 OECD countries analysed, and that has been constant for the LAST 30 YEARS.

    The academics who come along and state that debt approaching 90% of GDP is a drag on growth, and essentially saying we hit the wall a while ago, fail to come up with a realistic solution or even a model for maintaining debt at or below this threshold. Basically turning around a thirty year trend.

    The best these guys, presumably la creme de la creme of economists working for the BIS, the Central Bank’s Bank, can come up with is

    “”A clear implication of these results is that the debt problems facing advanced economies are even worse than we thought,” said the authors. “The only way out is to increase saving.” However, the cost of ageing populations makes the challenge harder, they added.”

    Yep, its bad and the old gits are making it worse.

    Should have come to me and I could have told them that at Jackson’s Orifice.

    • http://overthepeak.com/wordpress/ Mystic

      Thanks for all that Windy.
      You should do a regular posting~!
      (I’ll keep this as an open tab and look into what I can look into)

    • http://overthepeak.com/wordpress/ Mystic

      I have you as `12Breakwind` / `Bob Travels` and have made it `author` (but if you want to change names and go with a new one….let me know~!).

    • snedmeister1

      Nice post Windy….

      The first article makes me think that banks can see a rise in interest rates coming, and are
      looking into finances, as so many are on the “month to month” living “paycheck to paycheck” already,
      and the banks want to pre-empt a wave of customers requesting payment breaks…???

      On the question about how much debt is too much debt, my first immediate response that popped into
      my head was, we should be specific about what kind of debt…
      Obviously, the “self liquidating debt” is always good, as it pays for it’s self….

      Consumer debt on the other hand, taken to buy the new 3D TV from Dixons on the 15% APR credit card
      is probably always bad….

      Not trying to be a smart arse though, but it would depend on how much debt is of the bad kind,
      respective to how much debt is of the good kind…

      ( Or I could still have my arse inserted into that orifice again…) :)