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Paul Singer’s “Vision” Of The Coming “Riot Point” And The Fed’s “Formula For Destruction” | Zero Hedge
We sympathize with traditional stock and bond investors, who are faced with extremely poor choices today. QE has distorted the prices of all traditional asset classes to such an extent that none currently promises a fair return with modest risk…. Because the dominant force in securities-price movements today is government policy, particularly the governmental buying of bonds and stocks, there is a vulnerability to all trading and investing prospects that cannot be assessed or measured with confidence… Since there is no history of Americans losing confidence in the basic soundness of their currency and their government, and since monetary policy today is so manipulative and large, it will be hard to parse the reasons for any particular market moves in 2014.
– Paul Singer, Elliott Management
As always, perhaps the best periodic commentary on the state of the “markets” (even if such a thing has not existed for the past 5 years) and global economy comes from the person whose opinion has not been swayed by fly-by-night screechers and book-peddling pundits who fit in CNBC’s octobox and who come fast and are forgotten even faster, and whose 37 year track record at Elliott Management, whose assets he has grown from $1.3 million to $23 billion, speaks for itself: Paul Singer.
Below are the key excerpts from his January letter.
Imagine how mainstream experts would have reacted to the following set of predictions in 2006: “In two years Lehman will be bankrupt; Merrill and Bear will be acquired in distressed takeunders; Citicorp, AIG, Chrysler, GM, Delphi, Fannie and Freddie will be taken over by the government facing possibly hundreds of billions of dollars of losses; and only 13 global megabanks will survive.”
The 2008 crisis had a lasting and profound impact on virtually the entire developed world. The financial system was brought to the brink of collapse; conditions were created for the radical monetary policy of the past five years and a severely distorted recovery; the plans and dreams of hundreds of millions of people were disrupted, in some cases catastrophically; and societal values were significantly twisted away from individual responsibility toward dependency. In fact, the consequences of the bubble, the bust and the policy aftermath are not yet in full historical view. Despite all the pain, policymakers
refuse to take responsibility for the bubble, the distortions of the bubble years, the ensuing failure to lay the groundwork for strong post-bust growth, the continued riskiness and fragility of the major financial institutions, the lack of appropriate policies to deal with the bust, or their total inability to deal with competitive and technological challenges in the labor market.
It is not that the path toward destruction was impossible to see. On the contrary, a number of people saw the disaster coming, even if they did not all see the timing or the shape of it. The strangest part of the whole series of events is that only a few large professional investors noticed the smoke and shouted “fire.” Policymakers, particularly at the Fed and including (importantly) Janet Yellen, paid some small lip service to the building risks, but they were wedded to their primitive “models” and had a completely inadequate grasp of modern financial instruments, leverage and the interconnectivity of financial institutions. Not only did policymakers fail to understand what was happening and how to deal with the crisis and its aftermath, but also many of those same policymakers, and ALL of the structures and assumptions that prevailed pre-crash, are still in place today. No apologies have been issued. There has been a great deal of partisan back-and-forth and successful lobbying, but sadly the financial system is still not sound. This may be impossible to prove until the next crisis, but you could have said the same about conditions leading up to the last one.
Policymakers were and remain asleep at the wheel. The lack of introspection at the Treasury, the Fed, Congress, the White House and other regulatory bodies is astounding. Instead of taking reasonable and conservative steps to strengthen the financial system and to reach consensus on what is necessary to generate growth, there has been a series of cronyist, ideological, punitive steps that have neither catalyzed the growth that this country needs nor made financial institutions safe. At the same time, the Administration has allowed (and encouraged) the Fed to carry the ball all by itself, heaping praise on it for saving the world at the very time that the White House is shirking its own responsibilities. The Fed’s “dual mandate” (to promote “maximum employment” as well as “price stability”) is bunk in today’s context. It seems as if the entire world is acting as if the Fed actually has a “total mandate” and the rest of the federal government gets to stand around and applaud its heroic efforts. In fact, what we have now is a lopsided recovery, gigantic price risk in financial markets because of QE, and unknown but potentially massive risks of inflation and the ultimate loss of confidence in the major paper currencies, all because the federal government is more interested in ideology than in getting the country back on track, and the Europeans are more interested in preserving the euro than promoting the prosperity of the sovereign nations of Europe.
* * *
For private investment firms like hedge funds, leverage in the modern world is a matter of semi-volition. True, it is much more readily available than in the past, but there are credit departments and initial margins limiting the size of positions. The big financial institutions, on the other hand, found themselves in an environment starting a couple of dozen years ago in which leverage was entirely voluntary, subject to no real constraint because they were not required to post initial margins with each other. Since many of their positions were “hedges” in similar securities, they risk-underwrote those trades using models that projected very little possibility of generating losses. As a result, the entire system has become super-leveraged, super-interconnected and very brittle. Given the benefits of hindsight, we do not have to prove the proposition that the limits of leverage were exceeded in the recent past and that the system was improperly risk-managed by governments and by the managements of financial institutions. It is frustrating, therefore, that no meaningful de-risking of the financial system has occurred since the crisis. You will see a system primed for a rerun of 2008, perhaps even faster and more intense this time.
MONETARY POLICY GOING FORWARD
QE has created asset price booms, but historically high excess bank reserves are still generally not being lent, and monetary velocity remains relatively low. But last spring, we witnessed the first tangible sign that the Fed may be trapped in its current posture. The Fed cannot retreat due to excessive debt in the system, the fragility of major financial institutions (still opaque and overleveraged) and the prospect that a collapse of bond prices could lead to a quick, deep recession. This situation may be the early stages of a phase in which the Fed is afraid to act because it has the “tiger by the tail,” and perhaps is beginning to realize that the current situation carries significant risks. QE has not generated a sharp upsurge of sustaining and self-reinforcing growth thus far. What it has done is lift stock and asset prices and exacerbate inequality. If investors lose confidence in paper money, as evidenced by either a hard sell-off in one of the major currencies or a sharp fall in bond prices, the Fed and other major central bankers will be in a pickle. If they stop QE and/or raise short-term rates to deal with the loss of confidence, it could throw global markets into a tailspin and the worldwide economy into a severe new recession. However, if they try to deal with the loss of confidence by stepping up QE or keeping interest rates at zero, there could be an explosion in commodity and other asset prices and a sharp acceleration in inflation. What would be the “exit” from extraordinary Fed policy at that point? The current, benign-looking environment (low inflation and
stable economies) is by no means ordained to be the permanent state of things. At the moment, “tapering” is expected to get underway, but that prospect represents a tentative, slight diminution of bond-buying. It contains no real promise of normalizing monetary conditions. If the economy does not light up, the impact of another year of full-bore QE is impossible to predict. Five years and $4 trillion have created economic and moral distortions but very little sustainable value. Maybe the sixth year will produce the “riot point.” Nobody knows, including the Fed.
As we and others have said, the Fed is overly reliant upon models that do not account for real-world elements of instruments, markets and traders in the derivatives age. Models cannot possibly take into account unpredictable interactions among huge positions and traders in new and very complicated instruments. Thus, the Fed should be careful, humble and conservative. Instead, it is just blithely plowing ahead as if it knows exactly what is going on. Intelligent captains sail uncharted waters with extra caution and high alert; only fools think that each mile they sail without sinking the vessel further demonstrates that they are wise and the naysayers were fools. This is a formula for destruction. The crash of 2008 should have been smoking-gun evidence of the folly of this approach, but every mistake leading up to the crash, especially excessive and “invisible” leverage and interest rates that were too low, has been doubled down upon in the years since.
A classicial economist… and Harvard professor… preaching to the world that one’s money is not safe in the US banking system due to Ben Bernanke’s actions? And putting his withdrawal slip where his mouth is and pulling $1 million out of Bank America? Say it isn’t so…
From Terry Burnham, former Harvard economics professor, author of “Mean Genes” and “Mean Markets and Lizard Brains,” provocative poster on this page and long-time critic of the Federal Reserve, argues that the Fed’s efforts to strengthen America’s banks have perversely weakened them. First posted in PBS.
Is your money safe at the bank? An economist says ‘no’ and withdraws his
Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.
Why am I getting in line to take my money out of Bank of America? Because of Ben Bernanke and Janet Yellen, who officially begins her term as chairwoman on Feb. 1.
Before I explain, let me disclose that I have been a stopped clock of criticism of the Federal Reserve for half a decade. That’s because I believe that when the Fed intervenes in markets, it has two effects — both negative. First, it decreases overall wealth by distorting markets and causing bad investment decisions. Second, the members of the Fed become reverse Robin Hoods as they take from the poor (and unsophisticated) investors and give to the rich (and politically connected). These effects have been noticed; a Gallup poll taken in the last few days reports that only the richest Americans support the Fed. (See the table.)
Why do I risk starting a run on Bank of America by withdrawing my money and presuming that many fellow depositors will read this and rush to withdraw too? Because they pay me zero interest. Thus, even an infinitesimal chance Bank of America will not repay me in full, whenever I ask, switches the cost-benefit conclusion from stay to flee.
Let me explain: Currently, I receive zero dollars in interest on my $1,000,000. The reason I had the money in Bank of America was to keep it safe. However, the potential cost to keeping my money in Bank of America is that the bank may be unwilling or unable to return my money.
They will not be able to return my money if:
- Many other depositors like you get in line before me. Banks today promise everyone that they can have their money back instantaneously, but the bank does not actually have enough money to pay everyone at once because they have lent most of it out to other people — 90 percent or more. Thus, banks are always at risk for runs where the depositors at the front of the line get their money back, but the depositors at the back of the line do not. Consider this image from a fully insured U.S. bank, IndyMac in California, just five years ago.
- Some of the investments of Bank of America go bust. Because Bank of America has loaned out the vast majority of depositors’ money, if even a small percentage of its loans go bust, the firm is at risk for bankruptcy. Leverage, combined with some bad investments, caused the failure of Lehman Brothers in 2008 and would have caused the failure of Bank of America, AIG, Goldman Sachs, Morgan Stanley, Merrill Lynch, Bear Stearns, and many more institutions in 2008 had the government not bailed them out.
In recent days, the chances for trouble at Bank of America have become more salient because of woes in the emerging markets, particularly Argentina, Turkey, Russia and China. The emerging market fears caused the Dow Jones Industrial Average to lose more than 500 points over the last week.
Returning to my money now entrusted to Bank of America, market turmoil reminded me that this particular trustee is simply not safe. Or not safe enough, given the fact that safety is the reason I put the money there at all. The market turmoil could threaten “BofA” with bankruptcy today as it did in 2008, and as banks have experienced again and again over time.
If the chance that Bank of America will not return my money is, say, a mere 1 percent, then the expected cost to me is 1 percent of my million, or $10,000. That far exceeds the interest I receive, which, I hardly need remind depositors out there, is a cool $0. Even a 0.1 percent chance of loss has an expected cost to me of $1,000. Bank of America pays me the zero interest rate because the Federal Reserve has set interest rates to zero. Thus my incentive to leave at the first whiff of instability.
Surely, you say, the federal government is going to keep its promises, at least on insured deposits. Yes, the Federal Government (via the FDIC) insures deposits in most institutions up to $250,000. But there is a problem with this insurance. The FDIC currently has far less money in its fund than it has insured deposits: as of Sept. 1, about $41 billion in reserve against $6 trillion in insured deposits. (There are over $9 trillion on deposit at U.S. banks, by the way, so more than $3 trillion in deposits is completely uninsured.)
It’s true, of course, that when the FDIC fund risks running dry, as it did in 2009, it can go back to other parts of the federal government for help. I expect those other parts will make the utmost efforts to oblige. But consider the possibility that they may be in crisis at the very same time, for the very same reasons, or that it might take some time to get approval. Remember that Congress voted against the TARP bailout in 2008 before it relented and finally voted for the bailout.
Thus, even insured depositors risk loss and/or delay in recovering their funds. In most time periods, these risks are balanced against the reward of getting interest. Not so long ago, Bank of America would have paid me $1,000 a week in interest on my million dollars. If I were getting $1,000 a week, I might bear the risks of delay and default. However, today I am receiving $0.
So my cash is leaving Bank of America.
But if Bank of America is not safe, you must be wondering, where can you and I put our money? No path is without risk, but here are a few options.
- Keep some cash at home, though admittedly this runs the risk of loss or setting yourself up as a target for criminals.
- Put some cash in a safety box. There is an urban myth that this is illegal; my understanding is that cash in a safety box is legal. However, I can imagine scenarios where capital controls are placed on safety deposit box withdrawals. And suppose the bank is shut down and you can’t get to the box?
- Pay your debts. You don’t need to be Suze Orman to know that you need liquidity, so do not use all your cash to pay debts. However, you can use some surplus, should you have any.
- Prepay your taxes and some other obligations. Subject to the same caveat about liquidity, pay ahead. Make sure you only pay safe entities. Your local government is not going away, even in a depression, so, for example, you can prepay property taxes. (I would check with a tax accountant on the implications, however.)
- Find a safer bank. Some local, smaller banks are much safer than the “too-big-to-fail banks.” After its mistake of letting Lehman fail, the government has learned that it must try to save giant institutions. However, the government may not be able to save all failing institutions immediately and simultaneously in a crisis. Thus, depositors in big banks face delays and defaults in the event of a true crisis. (It is important to find the right small bank; I believe all big banks are fragile, while some small banks are robust.)
Someone should start a bank (or maybe someone has) that charges (rather than pays) interest and does not make loans. Such a bank would be a good example of how Fed actions create unintended outcomes that defeat their goals. The Fed wants to stimulate lending, but an anti-lending bank could be quite successful. I would be a customer.
(Interestingly, there was a famous anti-lending bank and it was also a “BofA” — the Bank of Amsterdam, founded in 1609. The Dutch BofA charged customers for safe-keeping, did not make loans and did not allow depositors to get their money out immediately. Adam Smith discusses this BofA favorably in his “Wealth of Nations,” published in 1776. Unfortunately — and unbeknownst to Smith — the Bank of Amsterdam had starting secretly making risky loans to ventures in the East Indies and other areas, just like any other bank. When these risky ventures failed, so did the BofA.)
My point is that the Federal Reserve’s actions have myriad, unanticipated, negative consequences. Over the last week, we saw the impact on the emerging markets. The Fed had created $3 trillion of new money in the last five-plus years — three times more than in its entire prior history. A big chunk of that $3 trillion found its way, via private investors and institutions, into risky, emerging markets.
Now that the Fed is reducing (“tapering”) its new money creation (now down to $65 billion a month, or $780 billion a year, as of Wednesday’s announcement), investments are flowing out of risky areas. Some of these countries are facing absolute crises, with Argentina’s currency plummeting by more than 20 percent in under one month. That means investments in Argentina are worth 20 percent less in dollar terms than they were a month ago, even if they held their price in Pesos.
The Fed did not plan to impoverish investors by inducing them to buy overpriced Argentinian investments, of course, but that is one of the costly consequences of its actions. If you lost money in emerging markets over the last week, at one level, it is your responsibility. However, it is not crazy for you to blame the Fed for creating volatile prices that made investing more difficult.
Similarly, if you bought gold at the peak of almost $2,000 per ounce, you have lost one-third of your money; you share the blame for your golden losses with Alan Greenspan, Ben Bernanke and Janet Yellen. They removed the opportunities for safe investments and forced those with liquid assets to scramble for what safety they thought they could find. Furthermore, the uncertainty caused by the Fed has caused many assets to swing wildly in value, creating winners and losers.
The Fed played a role in the recent emerging markets turmoil. Next week, they will cause another crisis somewhere else. Eventually, the absurd effort to create wealth through monetary policy will unravel in the U.S. as it has every other time it has been tried from Weimar Germany to Robert Mugabe’s Zimbabwe.
Even after the Fed created the housing problems, we would have been better of with a small 2009 depression rather than the larger depression that lies ahead. See my Making Sen$e posts “The Stockholm Syndrome and Printing Money” and “Ben Bernanke as Easter Bunny: Why the Fed Can’t Prevent the Coming Crash” for the details of my argument.
Ever since Alan Greenspan intervened to save the stock market on Oct. 20, 1987, the Fed has sought to cushion every financial blow by adding liquidity. The trouble with trying to make the world safe for stupidity is that it creates fragility.
Bank of America and other big banks are fragile — and vulnerable to bank runs — because the Fed has set interest rates to zero. If a run gathers momentum, the government will take steps to stem it. But I am convinced they have limited ammunition and unlimited problems.
What is the solution? For you, save yourself and your family. For the system, revamp the Federal Reserve. The simplest first step would be to end the dual mandate of price stability and full employment. Price stability is enough. I favor rules over intervention. We don’t need a maestro conducting monetary policy; we need a system that promotes stability and allows people (not printing presses) to make us richer.
The fifth anniversary of Zero Hedge is just around the corner, and so, for the fifth year in a row we continue our tradition of summarizing what you, our readers, found to be the most relevant, exciting, and actionable news of the year, determined objectively by the number of page views. Those eager for a brief stroll down memory lane of prior years can do so at their leisure, by going back in time to our top articles of 2009, 2010, 2011 and 2012. For everyone else, without further ado, these are the articles that readers found to be the most popular posts of the past 365 days.
- In 25th place, with just over 100k reads, was the extended profile of the puppetmaster of the biggest geopolitical event of 2013, the false flag-driven Syran conflict which nearly escalated into the world’s first YouTube “justified” world war pitching the US-led west against the Russia-led east, the Saudi intelligence chief: Prince Bandar, exposed in “Meet Saudi Arabia’s Bandar bin Sultan: The Puppetmaster Behind The Syrian War.” The war was avoided with a last minute gambit by Putin, which lead to a historic detente between the US and Iran, as well as an unprecedented breakdown in US relations with its long-time middle east allies Saudi Arabia and Israel. Look for the Middle East to make geopolitical headlines in the new year since the underlying issue – Europe’s dependence on Gazprom – remains entirely unresolved.
- The 24th most popular article hardly needs an explanation: “The Chinese Don’t Want Dollars Anymore, They Want Gold” – London’s Gold Vaults Are Empty: This Is Why.” The only comment here is that like above, the trend of gold’s transfer from West to East, started in earnest in late 2012, and peaking in 2013, is sure to continue in 2014 when the liquidation of paper gold in Western capital markets will afford Chinese buyers with ever more attractive prices at which to purchase physical gold
- In 23rd spot an “Unidentified Navy Officer summed it all up” when he said that “I didn’t join the navy to fight for Al Qaeda in a Syrian civil war.” It is understandable why over 106,000 people agreed with the message
- The 22nd most popular article looked at “What Happened The Last Time We Saw Gold Drop Like This?” which compared the fall in the price of gold in 2013 to previous historic occasions, most notably the months just before the collapse of Lehman. For now, courtesy of the $170 billion in liquidity injected by the Fed and the BOJ, “this time has proven different.” But with the Fed now tapering, how much longer will the illusion persist? We, like everyone else, look to 2014 for the answer.
- With 108k views, the 21st most read post of 2013 revealed the “Photos And Video Of the Boston Bombing Suspects“, culminating the most violent terrorist event in years, and one which brought back vivid memories of the events from September 11
- It may seem like a distant memory now, but the shocking announcement from mid-March in which Cypriot deposits were confiscated without a warning, reverberated across Europe and all insolvent banking systems, especially since it is now the blueprint of how banks will impair depositors going forward. Then again, with over 112k reads of our summary “For Everyone Shocked By What Just Happened… And Why This Is Just The Beginning” we reminded our readers that the deposit confiscation event of 2013 was predicted on these pages nearly two years earlier, and explained why, indeed, this is just the beginning of the great balance sheet rebalancing. For now Europe has managed to hide its hundreds of billions in bad loans under the couch; 2014 will be a different story. Look for the Cyprus “blueprint” to see a much wider acceptance in the coming year.
- In 19th spot, mother nature reminded everyone with a “Stunning Time-Lapse Video Of 2-Mile Wide Oklahoma Tornado” that despite their sense of omnipotence, the central planners better pray each and every day that in a world priced to beyond perfection, that there are no material natural disasters. Because 10 out of 10 times, a liquidity tsunami generated from a central bank’s printer is powerless to withstand a natural one, as the Fukushima catastrophe reminds us each and every day with headlines of its ever deteriorating radiation “containment.”
- A long-time favorite of readers, Kyle Bass’ Japan thesis came one step closer to fruition when earlier this year Japan went all in on its great reflation experiment, described in “Kyle Bass Warns The ‘AIG’ Of The World Is Back“, a presentation seen by over 114K readers. So far Abenomics has been a failure with wages contracting, import food and energy prices soaring, a record trade deficit (yes, Abenomics was supposed to boost net exports), and of course Fukushima in the background, but for now everyone has a rampaging Nikkei to be easily distracted by. With Abe’s popularity finally tumbling, will his second tenure as Prime Minister be cut short, and would his departure finally force Japan to cross the event horizon of no return? This is but another question which we hope 2014 will answer.
- In 17th spot, we revealed some very disturbing trends in US energy consumption with “These Charts Better Not Reflect The True State Of The US Economy.” Because while the shale revolution may have revealed a (transitory) marginal source of oil, what remains unknown is why demand for energy in the US economy is tumbling in parallel. Unless, of course, the narrative about a US recovery has been a lie from the beginning…
- With 121k reads, in the 16th top spot another post that needs no explanation was “Stunning Images From China: Ten Thousand People Waiting In Line To Buy Gold“. Perhaps the only article that could beat this one is “Ten thousand hedge fund managers waiting in line to sell GLD”
- There are stereotypes about others, and then there are stereotypes about America. Which perhaps explains why over 121k people eagerly read “10 Things Most Americans Don’t Know About America.” We can only hope they learned something.
- It may be forgotten now, but the biggest story of early 2013 was the Bundesbank’s shocking announcement in mid-January that it would proceed to repatriate some 700 tons of its gold held in central bank vaults in New York and Paris. Of course, the events described in “It Begins: Bundesbank To Commence Repatriating Gold From New York Fed” and read by 127k people, could be seen coming by Zero Hedge readers from a mile away: after all it was this website that repeatedly warned in late 2012 about the trials and tribulations that had surrounded the official German gold hoard. We can only hope that we were in some part responsible for the Buba’s correct decision to repatriate its gold. Then again, as we updated last week, having collected only 37 tons of gold in one year (out of 700), Germany will really have to pick up the pace if it hopes to have recourse to its hard currency before it is no longer a matter of convenience but one of survival.
- The 13th top article of the year was the release of the list with “132 Names Who Pulled Cyprus Deposits Ahead Of “Confiscation Day.” It appeared the Cyprus deposit confiscation was not a complete secret to everyone, but then again the Animal Farm “new normal” justice in which some are more equal than others is hardly a surprise to anyone these days.
- And speaking of confiscation, the 12th most read article of 2013, with 131k views was “Poland Confiscates Half Of Private Pension Funds To “Cut” Sovereign Debt Load.” It would appear that wealth transfer, first voluntary and then, not so much, will be an increasingly prevalent theme of the “recovery”…
- But the biggest stunner in this category was the impromptu announcement itself when on March 16, “Europe Does It Again: Cyprus Depositor Haircut “Bailout” Turns Into Saver “Panic”, Frozen Assets, Bank Runs, Broken ATMs.” Don’t worry though: Europe is now fixed, it is recovering, and, if one believes the continent’s unelected leaders, all shall forever be well. We are confident 2014 will show otherwise.
- The 10th most read article in 2013 dealt with the bedrock of the New Normal – the dollar’s reserve currency status, and rather, its gradual disintegration as China increasingly makes itself heard. It made itself heard loud and clear to the 142k readers who clicked on “Thanks, World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency Convertibility.” The loss of USD-reserve status will be yet another theme to keep a close eye on in 2014 and onward.
- Showing just how reliant on welfare the US has become was top article #9 in which a leaked USDA memo hinted of a “Foodstamp Program Shutdown Imminent” which grabbed the attention of 148k readers. For now SNAP as it is better known has been merely “tapered”, not fully shut down, although ensuing Walmart stampedes driven by EBT card glitches provided a glimpse of just had bad things could be if indeed nearly 50 million Americans suddenly found themselves without government backstops
- The troubles of the poor were hardly an issue for the 8th most popular article of 2013 in which we asked if “The Russians Have Already Quietly Withdrawn All Their Cash From Cyprus?” Once again it was the middle class that got shafted, while those who could fly in and out on private jets appear to have gotten away unscathed. This is certainly the prevailing theme of the past five years and one which will accelerate into the future.
- 152k people read the breaking news from April when “Large Explosions Reported At Boston Marathon; Numerous Injuries And Casualties.” The focal point of all watercooler talk for the next several weeks, the analogies to terrorist attacks in the past were unavoidable even if the motivations behind the attacks turned out to be far less nefarious and organized than initially feared.
- 2013 was the year in which the largest US city (to date) filed bankruptcy. However it was “25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head” that was read by 154k people, that made this the 6th most popular article of 2013.
- 2013 was also the year in which the stock market finally took out its previous, 2007 highs, driven entirely by the unprecedented expansion of both the Fed’s and the Bank of Japan’s balance sheets. What over 163k found curious, however, were the other economic comparisons to “The Last Time The Dow Was Here…” Needless to say, there is nothing in the economy that would justify a market at the current levels, or even levels far lower, if it were only up to the economy. Luckily, there Fed is always there to lend a helping hand. And what can possibly go wrong…
- 2013 was not only the year of the Fed’s QEternity: it was also the year in which Japan went all in with its own reflation experiment. However, all will be for nothing unless the troubling facts revealed in “Why Have Young People In Japan Stopped Having Sex?” remain unresolved. Because at its core, Japan’s crisis is a demographic one, and at the current pace of social aging, there will be no Japan left in several decades. Unfortunately for Kuroda, he can’t print babies.
- The third most popular article of 2013 was posted almost exactly a year ago, when it “Put America’s Tax Hike In Perspective.” Over 171k people realized just how meaningless in the grand scheme of things was America’s grand bargain achieved last year at this time, over much stock market huffing and puffing. Then again, the fact that all major decisions in the US are put in the can that is later kicked down the street is also no news to anyone. The only thing in the here and now is theatrics, theatrics and more theatrics…
- The second most popular post of 2013, with nearly 200k reads, was our succinct summary of the US “recovery” laid out in “People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels.” We are happy that by now everyone has finally understood that plunging unemployment at the expense of a collapsing work force is nothing to be proud about.
- And in the top spot, with nearly 300k reads, our most read article was the satirical, sarcastic look at the Egyptian counterrevolution titled “Egyptians Love Us For Our Freedom.” Turns out…they don’t. But they certainly appreciate the irony of two-faced, hypocritical US foreign policy which was humiliated and left in tatters both in Egypt and in every other place around the globe where either Hillary Clinton or John Kerry came, saw and promptly departed in the past year.
So what to make of the world as we enter 2014?
With nearly $2 trillion in emergency liquidity pumped by the world’s two largest central banks – more than has been injected ever before – the entire world is floating on an ocean of excess liquidity, which for now has succeeded in masking just how ugly the truth beneath the calm surface is. Sooner or later, the tide comes out, as it always does, and the naked are revealed for all to see. However, this time it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who are finally exposed as wearing absolutely nothing. What happens then, and when that happens, is anyone’s guess. We, however, will be there to document every aspect of it.
Finally, and as always, we wish all our readers the best of luck and success in 2014, and leave everyone with a promise of what we can be 100% sure of: Zero Hedge will be there each and every day helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that the system is reduced to (ab)using each and every day just to keep the grand tragicomedy going for at least one more day.
From Bernanke’s infamous 2008 “not forecasting a recession” call to Fannie Mae CEO Franklin Raines 2004 “subprime assets are riskless” commentary, the following 10 “predictions” – as opposed to Wien “surprises” – will go down in infamy for their degree of errant-ness…
10) Ben Bernanke, 10th January 2008 – “The Federal Reserve is currently not forecasting a recession.”
A few months later, United States entered one of the wort recessions ever.
9) Herbert Hoover 1928: “The United States are nearer to the final triumph over poverty than ever before in the history of any land.”
The Great Depression started a year after. Stocks lost almost 80% under his presidency.
8) James Glassman & Kevin Hassett (writers of the book : DOW 36000), 1999: “Stocks are now in the midst of a one-time-only rise to much higher ground–to the neighborhood of 36,000 on the Dow Jones industrial average.”
According to their estimates, the Dow Jones was supposed to reach 36,000 points. The following years were marked by the Internet bubble, the Dow went down from 10,000 (book edition) to 7,200.
7) Georges W. Bush, 15th July 2008: “We can have confidence in the long-term foundation of our economy… I think the system basically is sound. I truly do.”
This sentence was pronounced exactly two months before the bankruptcy of Lehman Brothers.
6) Donald Luskin (US investment guru), 14th September 2008: “Anyone who says we’re in a recession, or heading into one—especially the worst one since the Great Depression—is making up his own private definition of ‘recession’.”
According to Luskin, Obama deliberately worsened economic figures to discredit McCain for the presidential election that took place two months later. Lehman Brothers filed for bankruptcy the next day.
5) Irving Fisher (economist), 15th October 1929: “Stock prices have reached what looks like a permanently high plateau.”
The crash of 1929 began the following week, the Dow Jones losing up to 85% of its value from the “permanent plateau”!
4) David Lereah (US economist), 12th August 2005: “I truly believe the housing market will continue to expand. But rather than the double-digit price appreciation we’ve seen, we might see that drop to a 5 or 6 percent appreciation sometime toward the end of next year.”
Real Estate prices fell sharper between 2006 and 2008 than during the Great Depression.
3) Joseph Cassano (Head of Financial Products at AIG), 2007: “It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these Credit Default Swap transactions.”
The following year, AIG was rescued by the government after huge losses. Especially on CDS positions…
2) Franklin Raines (CEO of Fannie Mae), 10th June 2004: “These supbrime assets are so riskless that their capital for holding them should be under 2 percent.”
The U.S. government intervened in 2008 to rescue Fannie Mae – in big trouble during the subprime crisis.
1) David Woo (Analyst, Bank of America), 5th December 2013 about bitcoin: “Our fair value analysis implies a price of $1300”
The future will tell whether it is reasonable to assign a “fair value” to this virtual currency. Meanwhile, the bitcoin still lost 46% of its value Friday…
Confused why the various US manufacturing indices have been on a tear in the past few months? Perhaps the fact that GM dealer lots are so full of cars they just couldn’t wait for even more deliveries has something to do with it. Which is also why in addition to reporting sales numbers for November that were largely in line with expectations, amounting to 212,060 (even if total Chevy Volts sold YTD of 20.7K were -0.6% less than in the same period in 2012), or 13.7% more than last year (estimated called for 13.% increase), of which a whopping 51,705 was in the form of “channel stuffed” units to be parked on dealer lots.
In fact, as the chart below shows, in the past three months, GM channel stuffing has exploded and soared by 150K units (the most ever for a 3 month period) from 628.6K to 779.5K. This represents the second highest amount of channel stuffing and is lower only compared to the 788.2K units “stuffed” exactly one year ago.
And while the topic of channel stuffing is not new here, as we have been covering it closely for the past three years, it is of note that even “serious” media such as Bloomberg pointed out yesterday that across the entire US car industry, and not just GM, channel stuffing is now the highest it has been since 2005. Surely all this pent up demand is there for a reason: after all, as in every centrally-planned economy, if you build it they will surely come…
» The Money Changers Serenade: A New Plot Hatches Alex Jones’ Infowars: There’s a war on for your mind!
Paul Craig Roberts
December 1, 2013
Former Treasury Secretary Timothy Geithner, a protege of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the handful of gigantic banks, whose existence attests to the fact that the Anti-Trust Act is a dead-letter law, Geithner has been appointed president and managing director of the private equity firm, Warburg Pincus and is on his way to his fortune.
A Warburg in-law financed Woodrow Wilson’s presidential campaign. Part of the reward was Wilson’s appointment of Paul Warburg to the first Federal Reserve Board. The symbiotic relationship between presidents and bankers has continued ever since. The same small clique continues to wield financial power.
Geithner’s career is illustrative. In the 1980s, Geithner worked for Kissinger Associates. In the mid to late 1990s, Geithner served as a deputy assistant Treasury secretary. Under Rubin and Summers he moved up to undersecretary of the Treasury.
From the Treasury he went to the Council on Foreign Relations and from there to the International Monetary Fund (IMF). From there he was appointed president of the Federal Reserve Bank of New York, where he worked to make banks more profitable by allowing higher ratios of debt to capital, thus contributing to the financial crisis.
Geithner arranged the sale of the failed Wall Street firm of Bear Stearns, helped with the taxpayer bailout of AIG, and rejected saving Lehman Brothers from bankruptcy in order to create the crisis atmosphere needed to more fully subordinate US economic policy to the needs of the few large banks.
Rubin, a 26-year veteran of Goldman Sachs, was rewarded by Citibank for his service to the banks while Treasury Secretary with a $50 million compensation package in 2008 and $126,000,000 between 1999 and 2009.
When a person becomes a Treasury official it is made clear that the choice is between serving the banks and becoming rich or trying to serve the public and becoming poor. Few make the latter choice.
As MIchael Hudson has informed us, the goal of the financial sector has always been to convert all income, from corporate profits to government tax revenues, to the service of debt. From the bankers standpoint, the more debt the richer the bankers. Rubin, Summers, Paulson, Geithner, and now banker Treasury Secretary Jack Lew faithfully serve this goal.
The Federal Reserve describes its policy of Quantitative Easing — the creation of new money with which the Fed purchases Treasury debt and mortgage backed securities — as a low interest rate policy in order to stimulate employment and economic growth. Economists and the financial media have parroted this cover story.
In contrast, I have exposed QE as a scheme for pumping profits into the banks and boosting their balance sheets. The real purpose of QE is to drive up the prices of the debt-related derivatives on the banks’ books, thus keeping the banks with solvent balance sheets.
Writing in the Wall Street Journal (“Confessions of a Quantitative Easer,” November 11, 2013), Andrew Huszar confirms my explanation to be the correct one. Huszar is the Federal Reserve official who implemented the policy of QE. He resigned when he realized that the real purposes of QE was to drive up the prices of the banks’ holdings of debt instruments, to provide the banks with trillions of dollars at zero cost with which to lend and speculate, and to provide the banks with “fat commissions from brokering most of the Fed’s QE transactions.” (See: http://www.paulcraigroberts.org )
This vast con game remains unrecognized by Congress and the public. At the IMF Research Conference on November 8, 2013, former Treasury Secretary Larry Summers presented a plan to expand the con game.
Summers says that it is not enough merely to give the banks interest free money. More should be done for the banks. Instead of being paid interest on their bank deposits, people should be penalized for keeping their money in banks instead of spending it.
To sell this new rip-off scheme, Summers has conjured up an explanation based on the crude and discredited Keynesianism of the 1940s that explained the Great Depression as a problem caused by too much savings. Instead of spending their money, people hoarded it, thus causing aggregate demand and employment to fall.
Summers says that today the problem of too much saving has reappeared. The centerpiece of his argument is “the natural interest rate,” defined as the interest rate at which full employment is established by the equality of saving with investment. If people save more than investors invest, the saved money will not find its way back into the economy, and output and employment will fall.
Summers notes that despite a zero real rate of interest, there is still substantial unemployment. In other words, not even a zero rate of interest can reduce saving to the level of investment, thus frustrating a full employment recovery. Summers concludes that the natural rate of interest has become negative and is stuck below zero.
How to fix this? The way to fix it, Summers says, is to charge people for saving money. To avoid the charges, people would spend the money, thus reducing savings to the level of investment and restoring full employment.
Summers acknowledges that the problem with his solution is that people would take their money out of banks and hoard it in cash holdings. In other words, the cash form of money provides consumers with a freedom to save that holds down consumption and prevents full employment.
Summers has a fix for this: eliminate the freedom by imposing a cashless society where the only money is electronic. As electronic money cannot be hoarded except in bank deposits, penalties can be imposed that force unproductive savings into consumption.
Summers’ scheme, of course, is a harebrained one. With governments running huge deficits, who would purchase bonds at negative interest rates? How would pension and retirement funds operate? Would they also be subject to an annual percentage confiscation?
We know that the response of consumers to the long term decline in real median family income, to the loss of jobs from labor arbitrage across national borders (jobs offshoring), to rising homelessness, to cuts in the social safety net, to the transformation of their full time jobs to part time jobs (employers’ response to Obamacare), has been to reduce their savings rate. Indeed, few have any savings at all. The US personal saving rate is currently 2 percentage points, about 30%, below the long term average. Retired people, unable to earn any interest on their savings from the Fed’s zero interest rate policy, are being forced to draw down their savings in order to pay their bills.
Moreover, it is unclear whether the savings rate is an accurate measure or merely a residual of other calculations. With so many people having to draw down their savings, I wouldn’t be surprised if an accurate measure showed the personal savings rate to be negative.
But for Summers the plight of the consumer is not the problem. The problem is the profits of the banks. Summers has the solution, and the establishment, including Paul Krugman, is applauding it. Once the economy officially turns down again, watch out.
This column first appeared as a Trend Alert, Trends Research Institute
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
London’s Mayor Says We Should “Thank the Super Rich” – Calls Them “Tax Heroes” and Compares to the “Homeless and Irish Travelers” | A Lightning War for Liberty
If you thought you had seen it all when it comes to sob stories of the “super rich” following the comparison of the criticisms of banker bonuses to the lynching of black people in the south by AIG’s CEO in September, think again. The latest groveling, inane defense of the “super rich” comes from none other than the gatekeeper of the largest oligarch whorehouse on planet earth. The Mayor of London, Mr. Boris Johnson.
Now I warn you, do not read the following Op-Ed on a full stomach. The vapid, nonsensical, Onion-like prose may very well induce fits of nausea and uncontrolled regurgitation. This is quite frankly one of the worst things I have ever read in my life. It echoes like a sort of grandiose ass-kissing ritual one would have encountered in a Middle Age court from an aspiring manservant of the realm, desperately trying to rapidly advance a coupe of notches up the social strata of some decadent feudal kingdom. Simply put, Boris Johnson should be ashamed to show his face in public after writing such disingenuous garbage.
Now for some excerpts from the UK Telegraph:
The great thing about being Mayor of London is you get to meet all sorts. It is my duty to stick up for every put-upon minority in the city – from the homeless to Irish travellers to ex-gang members to disgraced former MPs. After five years of slog, I have a fair idea where everyone is coming from.
But there is one minority that I still behold with a benign bewilderment, and that is the very, very rich. I mean people who have so much money they can fly by private jet, and who have gin palaces moored in Puerto Banus, and who give their kids McLaren supercars for their 18th birthdays and scour the pages of the FT’s “How to Spend It” magazine for jewel-encrusted Cartier collars for their dogs.
I suspect that the answer, as Solon pointed out to Croesus, is not really, frankly; or no happier than the man with just enough to live on. If that is the case, and it really is true that having stupendous sums of money is very far from the same as being happy, then surely we should stop bashing the rich.
So he starts off right away with complete idiocy. Sure, I genuinely agree that having that much money is more of a curse than a blessing, but that doesn’t mean we should stop bashing oligarchs. Not all (but most) oligarch wealth has been created or maintained and coddled via Central Bank policies that favor their class, bailouts and crony capitalist deals. That’s why the rest of us aren’t benefiting from this phantom “economic recovery.” Perhaps he forgot the saying by Honore de Balzac:
“Behind every great fortune lies a great crime.”
Now back to bumbling Boris.
While the mainstream media has been focused on the immediate crisis of the US government shutdown the bigger issues behind the current economic crisis are still largely ignored. This month’s Museletter explores what is really going on in two essays.
Fingers in the dike
The 19th century novel Hans Brinker, or The Silver Skates by American author Mary Mapes Dodge features a brief story-within-the-story that has become better known in popular culture than the book itself. It’s the tale of a Dutch boy (in the novel he’s called simply “The Hero of Haarlem”) who saves his community by jamming his finger into a leaking levee. The boy stays all night, despite the cold, until village adults find him and repair the leak. His courageous action in holding back potential floodwaters has become celebrated in children’s literature and art, to the point where it serves as a convenient metaphor.
Here in early 21st century there are three dams about to break, and in each case a calamity is being postponed—though not, in these cases, by the heroic digits of fictitious Dutch children.
A grasp of the status of these three delayed disasters, and what’s putting them off, can be helpful in navigating waters that now rise slowly, though soon perhaps in torrents.
1. Unconventional fuels and production methods
I’ve written so much on the subject of peak oil, and some of it so recently, that it would be redundant to go into much detail here on that score. Suffice it to say that world conventional crude oil production has been flat-to-declining for eight years now. Declines of the world’s supergiant oilfields will steepen in the years ahead. Petroleum is essential to the world economy and there is no ready and sufficient substitute. The potential consequences of peak oil include prolonged economic crisis and resource wars.
Producers of unconventional liquid fuels—tar sands, tight oil, and deepwater oil—are playing the role of Dutch boy in the energy world, though their motives may not be quite so altruistic. With unconventional sources included in the total, world petroleum production has grown somewhat in recent years, but oil prices are hovering at near-record levels (that’s because unconventionals are expensive to produce). The oil industry has successfully used this meager success as a public relations tool, arguing that it can continue pulling rabbits out of hats for as long as needed and that policy makers therefore need do nothing to prepare society for a peak-oil future. In fact, world oil markets are depending almost entirely on continued increasing production from the US—all of which must come from fracked, horizontally drilled wells that decline rapidly—to keep supplies steady.
Even the US Energy Information Administration recognizes that the US tight oil boom will be history by the end of the current decade—though the official forecast shows production levels gently drifting thereafter when in all likelihood they will plummet, given the spectacular per-well decline rates of the Bakken and Eagle Ford formations. Is there another Dutch boy waiting, finger ready? Tight oil deposits in other countries will take longer to develop and will present more technical challenges. Other unconventionals, like extra-heavy oil in Venezuela and kerogen deposits in the American West, will be even slower and more expensive to produce—if they’re ever tapped to any significant extent (Shell just abandoned its kerogen research operations without any prospect of eventual profitability).
Bottom line: the recent, ongoing “new normal” of high but stable oil prices may last another few years; after that, oil supplies will become much more problematic, and prices are anybody’s guess. The dam is weakening. Have your hip boots and waders ready.
2. Quantitative easing
The crash of 2008, bad as it was, should really be thought of as merely a symptom of a more pervasive, profound, and ongoing shift in the entire global economy. Our growth-based, fossil-fueled economic system is colliding with foreseeable energy and debt limits. We constructed our existing financial system during a historic period of anomalous rapid growth; without further growth in manufacturing, transport, and trade, the pyramid of credit and leverage built by investors during recent decades is likely to implode. We got just a taste of what might be in store with the Lehman and AIG failures.
Some who understood the system’s vulnerability early on, and who warned that a crash was imminent, forecast a rapid collapse of the entire economy. Each year from 2008 up to the present, these commentators have insisted that in a matter of months we’ll see bread lines, shuttered banks, and riots in the streets. Riots and bank failures have indeed shown up in Greece, but here in the US (and Britain, Germany, China, Canada, Australia . . . the list continues) economic life goes on. In the US, pre-crash norms in employment, household income, and house values have not returned, but neither has the sky fallen. Most economists say the nation is in the midst of a “fragile recovery.”
Why no collapse? Governments and central banks have inserted fingers in financial levees. Most notably, the Federal Reserve keeps crisis at bay by purchasing $85 billion in US Treasury bonds each month, using money created out of thin air at the moment of purchase. This enables the Federal government to borrow at low interest rates, and also props up the American financial industry. Virtually all of the Fed’s money stays within financial circles—mostly the “shadow banking system”; that’s a big reason why the richest Americans have gotten much richer in the past few years, while most regular folks are treading water at best.
Quantitative easing is poorly understood by the general public and provokes strong reactions from many economists. Some think QE must lead to hyperinflation (it hasn’t so far, and it’s been going on for nearly five years). Others think that, in principle, it could be used (if differently organized and applied) to solve all our debt problems.
Be that as it may, what has the too-big-to-fail, too-greedy-not-to shadow banking system done with the Fed’s trillions in free money? Blown another asset bubble and piled up more leveraged bets. No one knows when the latest bubble will pop, but when it does the ensuing crisis will likely be worse than that of 2008. Will central banks then be able to jam more fingers into the leaky levee? Will they have enough fingers?
3. Global warming “pause”
The threat of climate change needs no introduction—it’s the mother of all impending environmental crises. And we are already seeing serious impacts, including superstorms, droughts, and the melting of the north polar ice cap. Nevertheless, it’s all not as bad as it might be, were it not for the fact that the warming of Earth’s surface air temperatures has slowed since 1998 (which was an anomalously hot year).
Climate change deniers have seized upon evidence of this “pause” to argue that global warming has essentially stopped. After all, if the greenhouse-gas-laden atmosphere were in fact trapping more heat, where could all that heat be hiding?
Turns out, very little of Earth’s trapped heat warms the atmosphere and land surface; most of it (over 90 percent) is absorbed by the oceans. Part of the explanation for the slowdown in surface warming lies in the heating of deep ocean waters. Global warming hasn’t really “paused”; it’s just gone to the depths. At the same time, there has been a downswing in the Pacific Ocean’s natural temperature cycle, which has also correlated with a cluster of La Nina years (usually associated with a cooling of ocean surface waters). This temperature cycle masks the underlying warming trend. So it appears that, for now at least, Mother Earth herself is playing “The Hero of Haarlem.”
There’s no way to know how long this current cool cycle will last, though the previous Pacific cool phase, which started in the 1940s, continued for about 30 years. If the present cycle is of the same duration, then in about 15 years much of the heat currently being dumped in deep oceans may begin instead to remain in the atmosphere. At that point we will likely seeunprecedented rates of climate warming, and far worse episodes of extreme weather.
The fact that climate change is complex and non-linear makes it hard to communicate the urgency of the problem even to scientifically literate audiences. Prof. Arthur Petersen, chief scientist at the Netherlands Environmental Assessment Agency and part of the Dutch delegation that reviewed the latest IPCC report was quoted by BBC as saying: “It is a major feat that we have been able to produce such a document which is such an adequate assessment of the science. That being said, it is virtually unreadable!”
Making the most of borrowed time
In the story of the Dutch boy, adults in the village eventually find the brave child and make necessary repairs to the dike. But for the three leaky systems discussed above, necessary repairs aren’t being made. Most governments aren’t rapidly developing renewable energy and public transport infrastructure; instead, they’re spending their money on building more roads. The shadow banking system is not being downsized and regulated; it’s being propped up and inflated. Fossil fuel use is not being discouraged with meaningful carbon taxes (except in a very few countries); instead, oil and gas industries are subsidized.
The folks in charge will probably continue to buy as much time as they can, for as long as they can, even if doing so makes the situation worse in the long run. Nature is less predictable: humans cannot control the duration of the global warming “pause.”
The phrase “living on borrowed time” inevitably comes to mind, with its implication of impending doom. Yet we simply don’t know how serious the impacts of these delayed crises will be within a humanly meaningful timeframe—say, the next ten or twenty years. Doom is possible, but it may be that nature, central banks, and crafty drillers conspire to maintain the appearance of normalcy in the eyes of at least a substantial portion of the population even as the waters rise around our ankles. No collapse here, folks; just keep shopping.
It’s hard to know what attitude to adopt with regard to these things. Given that delays will likely make matters worse when the dam does break, and that repairs aren’t being undertaken, should we therefore say, “Bring on the crisis, let’s get it over with?” If that is our stance, then what might be done to accelerate events? Our oil-supply situation could be hastened slightly toward crisis by a decision against the Keystone XL pipeline, which would discourage further expansion of tar sands mining (there’s no “bring-on-the-crisis” upside to a decision in favor of the pipeline—that would worsen the climate dilemma without doing anything to end the global warming “pause”). Maybe causing a US government default would usher in the next chapter of global financial Armageddon: that’s entirely within the capabilities of at least a few people, and they seem to be doing a very good job of marching us toward the brink. Perhaps we’ll all be over the edge in just a few weeks.
Or shall we simply enjoy our remaining days of “normal” life? Spend time at the beach. Learn to play a musical instrument. See friends and family. Those are perfectly understandable and legitimate ways of whiling away borrowed time.
Here’s a thought: How about using whatever interval we have—whether it turns out to be weeks or decades—to build community resilience? Get to know your neighbors. Plan next season’s garden. Join efforts to create a community-run renewable energy utility company.Buy from local farmers. Put your savings in the local credit union. Take a Transition Launch! training course.
If we do these things now, then when fingers can no longer plug leaks the ensuing mess may be far less daunting. Meanwhile there may be some substantial psychological benefits from living in a way that’s more localized and communitarian.
If that’s your choice, you’d better get going. There’s no telling how much time we have.
- Richard Heinberg: why end of growth can mean more happiness (takeahappymoment.wordpress.com)
- America’s natural gas revolution isn’t all it’s ‘fracked’ up to be (valuewalk.com)
- SNAKE OIL: Chapter 5 – The Economics of Fracking: Who Benefits? (resilience.org)
- Q&A: Janet Tavakoli (ritholtz.com)
- Janet Tavakoli: Why POTUS Allowed Bailouts Without Indictments (huffingtonpost.com)
- Janet Tavakoli: There is an enormous amount of manipulation in the gold market… (maxkeiser.com)
- Janet Tavakoli: Bernanke’s Deposition: AIG, Goldman, Merrill and Bailouts (huffingtonpost.com)