Black Swan author's rules for living

Nicholas Taleb, gadfly author of The Black Swan, gives his 10 rules for surviving an unpredictable world with dignity."

1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2 Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3 It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

Peacenik is starting to get freaked out by Punditman's doomsday posts fluffed up with bits of feel good optimism. If Punditman keeps this up, Peacenik is going to jump out of his basement apartment window. Peacenik can't take much more. However Peacenik came across some simple rules for surviving. Surviving everyday life. Surviving going to work every day. And surviving Punditman turning into a doomer. Nassim Taleb is the author of the Black Swan. A Black Swan is a major event that comes as a complete suprise. Sort of like the global financial meltdown. September 11 was a Black Swan event. Tonight Peacenik will follow rule 2, inspite of mild agoraphobia. Peacenik will face Punditman. Face to Face. And Peacenik will survive.

The Second Stage: Another Real Estate Crisis is About to Hit


For a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits.

The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate--shopping malls, strip malls, warehouses, and office buildings. As businesses close and rents decline, the ability to service the mortgages on the over-built commercial real estate disappears.

The over-building was helped along by the irresponsibly low interest rates, but the main impetus came from the slide of the US saving rate to zero and the rise in household indebtedness. The shrinkage of savings and the increase in debt raised consumer spending to 72% of GDP. The proliferation of malls and the warehouses that service them reflect the rise in consumer spending as a share of GDP.

Like the federal government, consumers spent more than they earned and borrowed to cover the difference. Obviously, this could not go on forever, and consumer debt has reached its limit.

Shopping malls are losing anchor stores, and large chains are closing stores and even going out of business altogether. Developers who borrowed to finance commercial ventures are in trouble as are the holders of the mortgages, derivatives and other financial junk associated with the loans.

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punditman says...

Punditman hates to be a bearer of bad news, (lest he start to sound like the ever morose Peacenik). Punditman likes to think he is fundamentally an optimist and tries to see the good side of people and society and the innate capacity for creative action. However, he is also one who hates to have the wool pulled over his eyes, and there's a lot of wool pulling by elites in media and government at the moment. Unfortunately, there is also a glut of willful ignorance on the part of the populace, which does not bode well for anyone's short -and long-term futures.

Unlike Europe, where people are hitting the streets in a wave of discontent, North Americans remain cocooned in their insulated, shopping mall worlds, following their sports teams, driving around on cheap gas, playing video games, wasting bandwidth on chain emails and getting hammered on the weekends. I suppose it's better than staring down debt loads or shrinking retirement portfolios, or, increasingly, lost employment.

Thankfully, Paul Craig Roberts is here to sort through all the nonsense economics taking place behind the CNN curtain and to issue yet another wake up call. He also offers an alternative to the bailing out by taxpayers of financial criminals, gamblers and incompetents. This offers punditman a glimmer of hope—which makes punditman an optimist.


Obama Dismissing Yoo Torture Memo Case?

by Patriot Daily News Clearinghouse Thu Jan 29, 2009 at 08:19:14 PM PST

Politico reported yesterday that Obama’s lawyers are prepping to defend John Yoo next week by moving to dismiss a lawsuit filed by Jose Padilla. Padilla seeks a declaration that Yoo’s legal memos that purported to authorize torture were unconstitutional. Obama presumably does not plan to support torture or the torture memos. Instead, Obama may argue that the case should be dismissed in order to protect governmental prerogatives, like immunity for government officials acting within the scope of their employment or state secrets. While any of these defenses may have legal validity, what about protecting the public’s prerogative to the rule of law? And, does the US want to continue shielding our government officials from torture liability while prosecuting foreign officials to hold them individually accountable?

This is not a case of a government lawyer simply writing a legal memorandum that is based on convoluting the law. As reported by Vanity Fair (video interview), Bush’s torture lawyers --- Bush’s lawyer Gonzales, Yoo and Jay Bybee (now a federal judge) at Justice Dept., William Haynes DOD lawyer for Rummy, David Addington lawyer for Cheney --- advocated torture that violated international law, the Geneva Conventions, Common Article 3, the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, the Army Field Manual and US laws. In other words, our government lawyers were advising Bush to violate the laws or commit a crime. Moreover, while the Bush meme is that the source of new torture techniques "trickled up from the ground at Guantánamo" to DC, it appears that the "origins lie in actions taken at the very highest levels of the administration—by some of the most senior personal advisers to the president, the vice president, and the secretary of defense." Further, these torture lawyers participated in ensuring that torture was implemented by flying down to Guantánamo to pressure the military to torture after witnessing "interrogations".

Its bad enough, as Punditman has posted, that Obama is prosecuting Bush's wars. Peacenik wants to cut Obama some slack. Peacenik understands that its tough to stop a war in its tracks. But, if Obama's justice department starts defending Bush's accomplices, it kind of makes Peacenik want to ralph. Its almost the weekend. Peacenik doen't like ralphing. But come on. Give Peacenik a break.

Stop Rearranging Deck Chairs on the Titanic and Nationalize the Damn Banks

By Joshua Holland, AlterNet. Posted January 30, 2009.

It's the best possible course to rescue our economy at this point; all the other options would be disastrous.

The painful but unavoidable reality of the financial crisis is that every dollar spent trying to prop up a failing bank is just good money thrown after bad; a taxpayer rip-off, short and sweet.

But in Washington, many are trying to avoid that fact nonetheless. Economist Paul Krugman wrote that the political establishment has "become devotees of a new kind of voodoo [economics]: the belief that by performing elaborate financial rituals we can keep dead banks walking." Goldman Sachs' economists estimate that those rituals might cost up to $4 trillion to perform.

It's time that the government stops flailing around with piecemeal bailouts and loan guarantees, takes over these institutions -- takes them out of private ownership -- sells off their good assets in an orderly way, trashes the toxic stuff and then resells them to the private sector down the road as leaner institutions that are dedicated to the primary purpose of banking: making loans and holding deposits.

Peacenik doubts that nationalizing the banks is the perfect solution. There are too many dominoes falling all at once. But the banks are at the root of this crisis. Their management does not deserve a bailout. Their management deserves jail and poverty. But Peacenik thinks nationalizing the banks is part of a possible, painful, muddling thru scenario. It has to be done. The alternatives aren't working. The world is witnessing incredible real time experiments in global monetary policy. The results of these experiments are apparent within days. Shovelling money into the black hole of banking has failed. Will the muddling through scenario work? Its Friday. Peacenik says maybe. Have a good weekend.

White House Dismisses Report of Iran Letter

Attacking Iran Still on the Table, Obama Spokesman Insists


Yesterday it was reported that the Obama Administration was looking at sending a reply letter to the Iranian government which would signal a willingness to improve ties and perhaps hold direct talks between the two. The move would have been the most significant move toward normalizing relations between the United States and Iran in 30 years.

White House spokesman Robert Gibbs was quick to dismiss the report. “Neither the president nor the secretary of state has seen such a letter,” according to Gibbs. He also added that many issues needed to be addressed with respect to Iran, including their illusory “illicit nuclear program” and their “threatening of peace in Israel.”

So just one day after the possibility that the Obama Administration might actually make a positive move toward peace with Iran, the White House is again raising the specter of a US military strike against Iran. The Iranian government has expressed repeated willingness to improve ties, and while President Obama has spoken of rapprochement as well his official policy has so far remained that of President Bush: barely restrained hostility.

punditman says....We shall see.


Obama the imperialist

Change? In foreign policy, hardly. The new president is in the classic liberal interventionist mould

The first Democratic president in the modern era to be elected on an anti-war ticket is also, to the relief of neocons and the liberal belligerati, a hawk. Committed to escalation in Afghanistan, his foreign policy selections also indicate bellicosity towards Sudan and Iran. During his first week in office he sanctioned two missile attacks in Pakistan, killing 22 people, including women and children. And his stance on Gaza is remarkably close to that of the outgoing administration. The question now is how Obama will convince his supporters to back that stance. Bush could rely on a core constituency whose commitment to peace and human rights is, at the very least, questionable. Obama has no such luxury. In making his case, he will need the support of those "liberal hawks" who gave Bush such vocal support.

It is tempting to dismiss the "pro-war left" as a congeries of discredited left-wing apostates and Nato liberals. Their artless euphemisms for bloody conquest seem especially redundant in light of over a million Iraqi deaths. Yet their arguments, ranging from a paternalistic defence of "humanitarian intervention" to the championing of "western values", have their origins in a tradition of liberal imperialism whose durability advises against hasty dismissal. In every country whose rulers have opted for empire, there has developed among the intellectual classes a powerful pro-imperial consensus, with liberals and leftwingers its most vociferous defenders.

Liberal imperialists have resisted explicitly racist arguments for domination, instead justifying empire as a humane venture delivering progress. Even so, implicit in such a stance was the belief that other peoples were inferior. Just as John Stuart Mill contended that despotism was a "legitimate mode of government in dealing with the barbarians" provided "the end be their improvement", so the Fabians contended that self-government for "native races" was "as useless to them as a dynamo to a Caribbean". Intellectuals of the Second International such as Eduard Bernstein regarded the colonised as incapable of self-government. For many liberals and socialists of this era, the only disagreement was over whether the natives could attain the disciplined state necessary to run their own affairs. Indigenous resistance, moreover, was interpreted as "native fanaticism", to be overcome with European tuition.

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punditman says...
It is true that Bush was profoundly unpopular, but thanks to the propaganda system, even at the height of US aggression most people didn't pay much attention to all his "collateral damage" in Iraq and Afghanistan. To no surprise, early indications are that they are paying even less attention to the deaths of innocents abroad under the overly popular Obama regime. This will change only if people stop seeing Obama as the peace president.

Punditman thinks you can kiss goodbye to any hope of the Obama administration taking Bush to task for breaking international law by willfully leading the US into war in Iraq under false premises (lies). By continuing such a policy "responsibly," is he not complicit?
And this says nothing of his fetish for attacking Afghanistan and Pakistan.

U.S. Moves to Bail Out Credit Union Network


In the latest effort to prop up a sector of the finance industry, federal regulators on Wednesday guaranteed $80 billion in uninsured deposits at the powerful institutions that service the nation's credit unions -- a maneuver that shows how the economic crisis continues to ripple across the U.S.

Regulators also injected $1 billion of new capital into the largest of these wholesale credit unions, U.S. Central Federal Credit Union of Lenexa, Kan., after the firm on Wednesday posted an unexpected $1.1 billion loss for 2008. U.S. Central serves essentially as a main clearinghouse for the others in the network.

Peacenik's memory is slightly longer than a couple or hours, or days. Peacenik remembers when credit unions were safe. Peacenik remembers when credit unions were immune to the financial meltdown. Peacenik remembers when the financial pundits were saying credit unions were ok. It wasn't that long ago. Peacenik now wonders if there is any segment of the economy that can survive without a bailout. And when politicians and pundits say some part of the economy is ok.....Peacenik thinks they are lying. Does this make Peacenik a bad person?


Coming Chaos? Maybe Not

Posted by Jason Bradford

This essay was written by Michael W. Foley (TOD user greenuprising), a former professor in the social sciences at an eastern U.S. university who I now know as a local farmer. At a recent Farmers' Market, I suggested that we needed a more empirical and scholarly discussion of the potential for social breakdown, especially violence, during energy descent. Thankfully, he agreed to write the following for The Oil Drum.

A sizable subset of what some on this site call “doomers” are convinced that the demise of the petroleum economy will bring social breakdown and a violent struggle of all against all. Some are even preparing for the chaos to come. I'm convinced we have to take end-of-affluence scenarios, including the scarier ones, seriously. But it can help everyone confront these possibilities if we try to think more intricately about how people might respond. In particular, we need to face head-on the question whether social breakdown and violence are inevitable.

The concerns I'm adddressing here are pretty U.S.-centric, though I'm drawing on examples from around the world. Images of marauding bands sacking grocery stores and small farms and of neighbors guarding their hoards with shotguns mainly come out of the American imagination, I suspect. In places like Western Europe and Latin America, with old traditions of militant social organization, acute shortages might bring people out into the streets all right, even entailing looting and such (remember the Latin American “food riots” of the 70's and 80's?), but crystallizing pretty quickly into organized efforts to get governments to respond. But I'll try to suggest some conclusions that might have broader relevance than the U.S.

Readers know that Peacenik sometimes succumbs to the arguments of "doomers". Some readers think Peacenik himself is a doomer. This article addresses the very issue that Peacenik has contemplated and posted on. Will the future be Mad Max like, or will it be more like the Great Depression with very little violence and some social cohesion? Jason Bradford makes an interesting case. Although his arguement that historical violence was frequently stirred up by politicians playing the ethnic card doesn't give Peacenik much comfort. Consider all the kooks that just ran for President in the U.S. McCain, a major candidate for President stirred up hate and fear of Obama. Will politicians stir up trouble in a bankrupt, depression- like U.S. What about all the kooks in the Canadian parliament. Peacenik fears we are doomed.

The Economic Crisis Isn't All Bad; It's a Chance for Us and Obama to Reimagine How We Live Our Lives

By Benjamin R. Barber, The Nation. Posted January 28, 2009.

Capitalism is on its knees and now we have a chance to create higher ideals beyond career climbing and mindless consumerism.

As America, recession mired, enters the hope-inspired age of Barack Obama, a silent but fateful struggle for the soul of capitalism is being waged. Can the market system finally be made to serve us? Or will we continue to serve it? George W. Bush argued that the crisis is "not a failure of the free-market system, and the answer is not to try to reinvent that system." But while it is going too far to declare that capitalism is dead, George Soros is right when he says that "there is something fundamentally wrong" with the market theory that stands behind the global economy, a "defect" that is "inherent in the system."

The issue is not the death of capitalism but what kind of capitalism -- standing in which relationship to culture, to democracy and to life? President Obama's Rubinite economic team seems designed to reassure rather than innovate, its members set to fix what they broke. But even if they succeed, will they do more than merely restore capitalism to the status quo ante, resurrecting all the defects that led to the current debacle?

Read on...

This is a pretty upbeat article, but Peacenik isn't convinced that Capitalism can be rejuvenated in any form. It would be nice to think the world was civilized enough to work through and possibly benefit from the economic crisis. But too many people are going to lose too much that they have come to believe they are entitled to. The present system has been tainted by too much corruption. Too many Ponzi Schemes. Too many lies. But the author is right, something new is coming. The status quo is finished.


January 26 2009: Gamblers, liars, fortune tellers and politicians

Ilargi: If today is any guide, my prediction yesterday that we might be in for a rough week looks spot on. Major corporations announced a minimum of 60.000 job losses. In one morning. The fact that this leads to stock exchanges doing happy dances, with London up close to 4%, and Amsterdam 6%, makes me lose what little faith I might have had left in our societies. As long as one man's misery is another man's profit in such a direct cause and effect line, there cannot be much of a future left.

What galls me in an equal fashion is reading about Citigroup buying a new $50 million corporate jet with its $50 billion taxpayer bail-out money. Or the ex-CEO of Deutsche Post, a semi-government institution as far as I can tell, getting a suspended sentence and a $1 million fine for sludging over $1 billion away from the German people. No jail, and an 0.1% fine. Justice, here we come. Or John Thain, who offers to pay back the $1.2 million he spent on his office while firing his employees. I think John Thain should by now be incapable of paying such amounts, period. Merrill Lynch paid out billions of dollars in bonuses when it was already clear they were going down and being bought up by Bank of America, with, there's the term once again, taxpayers' money. Confiscate it.

Yes the perverse reaction of the stock markets to mass layoffs is a harbinger of the investors' depravity. Peacenik thinks the stock markets are totally detached from reality. The markets glom onto the smallest fact and race up. Meanwhile the house of cards has completely fallen down. Wall Street is now totally occupied by a bunch of Baghdad Bobs. When will everyone finally clue in. Peacenik thinks never. They will never clue in. The Dow will trade down into the low 7000's and someone will start a rumour that Buffet is buying in. Larry Kudlow will call the bottom for the 60th consecutive week. And there will be a rally. But the rallies will be smaller and smaller and shorter and shorter. As everything falls to zero.

Boondoggles to the rescue!

by Dmitry Orlov

Economic collapse has a way of turning economic negatives into positives. It is not necessary for the United States to embrace the tenets of command economy and central planning to match the Soviet lackluster performance in this area. We have our own methods that are working almost as well. I call them “boondoggles.” They are solutions to problems that result in more severe problems than those they attempt to solve.

Just look around and you will see boondoggles sprouting up everywhere, in every field of endeavor: we have military boondoggles like Iraq, financial boondoggles like the doomed retirement system, medical boondoggles like private health insurance and legal boondoggles like the intellectual property system. At some point, creating another boondoggle becomes the preferred course of action: since the outcome can be predicted with complete accuracy, there is little risk. Proposing a solution that might work runs the risk of it not working.

Peacenik is having a hard time coming up with Peacenik's own boodoggle. Harper, and Bush before him, and Obama have cornered the market. What boondoggle would address the trillions of dollars of bad assets that the world banking system has on its books? Peacenik doesn't know. It is easier to boondoggle with the Leafs. If only they had some more grit, some more grinders. If only Pogge would get a few more starts. Peacenik suggests the Leafs trade what little talent they have. Peacenik suggests the Leafs get bigger and tougher and slower. Yes that will work.


Iraq veteran Kim Rivera and family appeal to Stephen Harper to stop U.S. war resister deportations

punditman says...

Another brave young American who has deserted from this criminal war. What will Obama do with those who are sent back? Just in case PM Harper misses this Youtube video, you can take action by going to:
War Resisters Support Campaign

Obama's Vietnam: Hey, hey, BHO, how many years until we go?

by Justin Raimondo

A "team of rivals" is how the Obama administration is being portrayed by the head-over-heels media, which started out by likening the new president to Lincoln and may end up comparing him – favorably – to God. A more appropriate phrase would be "team of retreads": Hillary at State, Gates still at Defense, and all the usual suspects lording it over their regional fiefdoms.

The appointment of George Mitchell, whose success at helping settle the Irish imbroglio suggests some skill at managing impossible situations, has evoked hope in those who pine for a more open-mined – and evenhanded – approach to the problem of Palestine. It is a hope I share.

Yet I'm not optimistic, for two very good reasons: Dennis Ross, whose appointment as plenipotentiary for Middle Eastern affairs seems to undercut what is likely to be the Mitchell approach, and Richard Holbrooke, whose dual domain of Afghanistan and Pakistan will be the focus of U.S. military action in the coming years. Specifically, more than 14 years – at least, that's what Holbrooke told us in a pre-election piece in Foreign Affairs magazine:

"The situation in Afghanistan is far from hopeless. But as the war enters its eighth year, Americans should be told the truth: it will last a long time – longer than the United States' longest war to date, the 14-year conflict (1961-75) in Vietnam."

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punditman says...
Thus far, I am wholly unimpressed by what is shaping up to be Obama's foreign policy. He now has the first blood of innocents on his hands, with his initial kill in Pakistan. Then there is the appointment of Richard Holbrooke. To learn of the blood on Holbrook'es hands, click here. Plus ca change, anyone?

State of Cringe

January 26, 2009
State of Cringe

Just as Mr. Obama has danced into the oval office, we've arrived at a moment when a lot of people have a hard time imagining the future. This includes especially the mainstream media, which has reached a state of zombification parallel to that of the banks. But even in the mighty blogosphere, with its thousands of voices unconstrained by craven advertisers or pandering managing editors, the view forward dims as a dark and ominous fog rolls over the landscape of possibilities.
For at least a year several story-lines have been slugging it out inconclusively for supremacy of the Web-waves. The main event has been the Deflationists versus the Inflationists. The first group basically says that so much "money" is being welshed out of existence that it dwarfs the new "money" being shoveled into existence in the form of bail-outs, tarps, and office re-decoration stipends. The Deflationists see the tattered remnants of the consumer credit economy auguring ever deeper into a hole until it is buried so far down that all the back-hoes ever sold will not be able to dig it out. The competing Inflationists say that the massive truckloads of shoveled-in "money" will soon.

The Harper government is bringing forth a budget that promises to pretty well make all the mistakes that every other government has and is making all over the world. Kunstler lays out the situation in clear terms. Peacenik has been wondering about the health of the Canadian banking sector. Peacenik has been wondering about the health of the Canadian economy. Harper will be talking about hope and the future. Kunstler doesn't see a way out or a way forward. Peacenik is cringing.

Changes Ahead You'd Better Believe In

The Freefalling Economy


When the applause dies down, the first African-American President of the United States will have to deal with things less cheerful than his Inaugural Ball. The US is losing close to 16,000 jobs a day on average. (That was 14,000 a day just a month ago.) It lost over 1.1 million jobs in just the two months of November and December. And the December loss in payroll employment (5,24,000) recorded by the Bureau of Labour Statistics, is a provisional figure. It is likely be revised upwards by several thousand - as were the numbers of earlier months.

This means that 2008, with 2.75 million jobs lost, was the worst year for layoffs in the United States since 1945. What does President Obama do? And what will he have to confront in doing it? He will have to create jobs on a scale unheard of in decades in his nation. Unemployment benefits, giant public works, massive infrastructure spending, a good health system, all these would also help lessen the hardship ahead. He will need - assuming he wants that - to flip a system where wealth still flows most disproportionately towards the top 1 per cent. In any effort he makes, he will run into an awesome corporate power - already regrouping from Meltdown Phase I.

Parallels with Franklin Delano Roosevelt are tempting - and dicey. True, FDR did not start out as a progressive. Quite the contrary. But circumstances forced him to take a path he might not have dreamed of. In that, there is perhaps hope for Obama. However, FDR lived and worked in a very different era. In an America where Labour and poor people had a voice. Where unions mattered. Where many diverse political currents had their own following. Where Socialists, Populists, Communists, Anarchists and others made an impact on political thought and process. In such a world, it was not only easier to do the bold thing - it was perhaps unavoidable. What kind of diversity is there now? Obama can choose to toe the corporate line broadly. Or he can choose to toe the corporate line narrowly. Anything else would be radical. It was great to have Pete Seeger at the inaugural concert. Alas, it won't be that best-loved folk singer calling the tune now.

The America Obama inherits is one where most Democrats and Republicans in Congress unite to stifle Labour.

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punditman says....

If you have a bruise, apply ice, right? Punditman is recovering from a bruising game of pond hockey, only to wake to find that Iceland's government has now fallen. The problem is that for deep bone bruises, ice will help, but it will take months, even years, before the body heals the area. Good luck, Iceland.

Meanwhile, economists whose brains are not bruised have a pessimistic outlook on growth for 2009 with greater job losses and worsening economic conditions in the months to come.

In the above article, the author points out that typically, governments will come up tomorrow with something that might have worked yesterday, and he quotes Nouriel Roubini ("Dr. Doom") as follows, "a housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, and a hedge funds bubble -- are all now bursting simultaneously."

Yeah, I get it— it's an unprecedented global, economic bruising.

Yikes, I'm starting to post like Peacenik. To end on a positive note, let's work towards finding new solutions today that will work for the problems of today—and tomorrow. Only then can we hope to heal these economic contusions.

Have I got a deal for you

From Monday's Globe and Mail
January 26, 2009 at 4:09 AM EST

For the newly laid off, life can seem bleak. Days once marked by painful morning commutes, endless meetings and wilted sandwiches at lunch now consist of hours spent searching online job ads, unshowered and bathrobe-clad, as thoughts drift to food banks and burning personal belongings for warmth.

But it doesn't have to be that way.

Tough times call for creative solutions, and as a growing number of Canadians are finding out, there are ways to get through life without draining their savings.

In Peacenik's ongoing effort to provide useful information in the face of disaster Peacenik posts this piece on bartering. Peacenik could have titled this post "When it rains it pours". Global financial news continues to frighten. The barter economy approaches. And this headline from the Vancouver Sun is absolutely terrifying: Abbotsford farm facing avian flu outbreak to cull 60,000 birds. Peacenik's Google Alert picked this story up. So just when everything is going to hell in a handcart, bird flu arrives in Canada with a vengeance. Should you be concerned? Peacenik is.


Downturn Accelerates As It Circles The Globe

Economies Worse Off Than Predicted Just Weeks Ago

By Anthony FaiolaWashington Post Staff Writer Saturday, January 24, 2009; Page A01

The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain yesterday becoming the latest nation to surprise analysts with the depth of its economic pain.

Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work.

Read on...

Usually Peacenik takes the weekends off from blogging. But given the dire situation, Peacenik is worried the Internet may not exist on Monday. Goofball optimist, Mark Carney, governor of the Bank of Canada, and a great Canadian, says the downturn will end in the second half of 2009. No worries. Meanwhile, Obama is holding emergency meetings this weekend just to nurse the world economy to last till Monday. Why would the Internet end? It is designed to withstand global thermal nuclear war. Peacenik thinks the public is one step away from grabbing their pitchforks and hitting the streets. Whoever controls the information controls the world. They will shut it down. And it will end badly. Who is "They"? What is "it"? Peacenik doesn't know.

Unprecedented Crisis In US, UK, Australia, Europe

Today was like most any day in recent memory: Another day, Another day of grim news.

In the US, President Obama is struggling to cope with an "unprecedented crisis", regulators closed Centennial Bank in California, Freddie Mac is asking for more cash, and 30 year bonds are getting shellacked.

Overseas, French and Flemish governments are intervening in the markets, the UK is shrinking at the fastest pace since 1980, and Australia needs action to save jobs. Rounding up the grim news, 1.2 million corporate networks have become infected with worms that attack Microsoft Corp.’s Windows operating system.

Here are the grim details.

Read on...

Peacenik just received an email from one of his regular correspondents reporting anecdotally that all was well with the local economy: mall busy, store shelves full, pubs packed, people happy. Then Peacenik went to Mish's website to read his overview of the "unprecedented crisis". How does Peacenik reconcile the two different points of view? Peacenik is reminded that institutions and individuals frequently engage in profligate behaviour just before they explode. Thus, Thain, the Wall St. CEO redecorated his office the week before he was fired. Penniless hobos will find six dollars on the street and buy a pint of beer rather than a bag of rice. Peacenik thinks Mish and his correspondent are telling the same story. There will be denial and the illusion of prosperity. Then it will end.


Perestroika 2.0 beta

by Dmitry Orlov

Congratulations, everyone, we have a new president: a fresh new face, a capable, optimistic, inspiring figure, ushering in a new era of responsibility, ready to confront the many serious challenges that face the nation; in short, we have us a Gorbachev. I don't know about you, but I find the parallel rather obvious.

Obama wishes to save the economy, and to inspire us with words such as "We will harness the sun and the winds and the soil to fuel our cars and run our factories." [Inauguration speech] At the same time, he cautions us that "We will not apologize for our way of life, nor will we waver in its defense" -- an echo of Dick Cheney's "The American way of life is non-negotiable." And so we descend from the nonexistent but wonderfully evocative "clean coal" to the more pedestrian "Put a little dirt in your gas tank!"

But these are all euphemisms: the reality is that it is either fossil fuels, which are running out while simultaneously destabilizing the planet's climate and poisoning the biosphere, or the end of industrial civilization, or (most likely) both, happening in that order. According to the latest International Energy Agency projections, the half-life of industrial civilization can be capped at about 17 years: it's all downhill from here. All industrial countries will be forced to rapidly deindustrialize on this time scale, but the one that has spent the last century building an infrastructure that has no future -- based on little houses interconnected by cars, with all of the accompanying moribund, unmaintainable infrastructure -- is virtually guaranteed to fall the hardest. An American's two greatest enemies are his house and his car. But try telling that to most Americans, and you will get ridicule, consternation, and disbelief. Thus, the problem has no political solution. Tragically, Obama happens to be a politician.

Dmitry Orlov is the author of Closing the Collapse Gap. He foresees the U.S. collapsing just like the Soviet Union collapsed. Peacenik thinks Orlov is on the something. Peacenik thinks the U.S. is going through a slow motion collapse right now. Will the U.S., in a state of societal collapse, be worse than the Soviet Union when it collapsed? Can the world survive a U.S. societal collapse, without falling into global thermal nuclear war, or world resource wars? Will the Coyotes survive in Pheonix? These are things that Peacenik thinks about. Have a good weekend.

Zombie Lies Still Find Targets

by dday

I was on this phone call today with Tom Malinowski from Human Rights Watch and others discussing the Obama executive orders on torture, and everyone is guardedly optimistic about what this means for the rule of law. If the gray areas on "other dispositions" besides trying or releasing Gitmo detainees and the wiggle room on extra-legal torture techniques are cleared up, we have a blueprint for restoring the rule of law. We need to be vigilant, however, to close whatever loopholes there may be.

This didn't seem to matter to one reporter on the call, who up front ADMITTED HE HASN'T BEEN FOLLOWING THE ISSUE and asked what would happen if Khalid Sheikh Mohammed had to be set free because we waterboarded him. This is someone who has confessed to practically every terrorist act of the last 40 years, wants to be a martyr, and for whom there is enough evidence untainted by torture to progress to trial.

The media has been doing the republicans' and the Bush's bidding so long that they can't help themselves. Peacenik thinks its time the media was re-educated. Obama and his media team need to shoot down the nonsense that is spouted on Fox and CNN and the New York Times. And some of the talking heads need to retire. GE, the corporate owner of CNBC, has been to the public trough for bailout money. Maybe its time to remind GE who is funding the bailout. Its not the republicans. Its not the conservatives. Its not Rush Limbaugh.


Household Dry Food Storage Guide

Posted by Jason Bradford on January 21, 2009

Given that I may have frightened some readers (and validated others) with my post on Scenario 2020 about a breakdown in the "Just-in-Time" delivery system, I thought it would be kind to talk a bit about preparation for transportation hiccups, specifically regarding food supplies.
This is a brief guide on how to estimate the amounts of staple, calorie dense, foods to be stored at a household scale. People choose to store food for a number of reasons, including being prepared for an emergency situation and saving money. Knowing some basic facts about human needs and the nutrient density of different kinds of food can help a family create a food buffer. However, people consume a great variety of food, and so planning for a household also requires accounting for special dietary needs and preferences.

Since Peacenik has been recommending stocking up on groceries Peacenik thought it would be a good idea to share this food storage guide.

January 21 2009: There is no time

Ilargi: Yesterday's post, The Shortest President, got me a lot of flack. And that is not a surprise, nor is it unwelcome. By all means, let's talk. Part of it may have been that we have a lot of new visitors these days, who don't yet know what we do or why we choose to do it the way we do. I suggest you all read a bunch of the primers you can find in the right hand side column. And then there are many people who feel that Obama's party was a good reason to focus on something else than economic trouble, if even just for one day. I hope you understand that I don't see that as my role, and that I also think the problems are too large and too imminent to act for even one day as if they don't exist. Plus, I think that the day when everyone focused on Obama is a very good time to explain the issues I have with his approach of the economy. Finally, I have the nagging feeling that many people still don't fully grasp the depth of the downfall, both so far and ahead of us.

I didn't say Obama would be the president with the shortest term in history, only that if he doesn't act now, there's a risk he might be. And by that I don't mean to bring up the risk of physical aggression against him, I abhor it and don't think he deserves that at all. I’m talking political crisis. The fact remains, though, that he is now responsible, and that his choices and appointments for his finance team are highly dubious, and that's putting it very mildly. Tim Geithner today in his conformation hearing had nothing to say about toxic debt than that it is "very hard to value". And from what I can tell, no-one pushed him to clarify his, or Obama's position. And that is just plain dangerous territory.

Yesterday there was a small inaugural rally in the markets. The pundits on CNBC were loving it. Obama has restored confidence in the markets. Peacenik just checked the Dow and TSX. Both are down almost 200 points. The banks sold trillions of dollars worth of worthless assests. They reaped millions of dollars in profit. And it was all an illusion. A fraud. A Ponzi Scheme. The game is almost up. Illargi thinks there is no way out. Peacenik hopes Illargi is wrong, for once.


White America, lighten up!

punditman says...

Reverend Joseph Lowery is being accused all over the web of being a black racist, for these closing remarks in the benediction at the Obama inauguration:
Lord, in the memory of all the saints who from their labors rest, and in the joy of a new beginning, we ask you to help us work for that day when black will not be asked to get in back, when brown can stick around, -- (laughter) -- when yellow will be mellow, -- (laughter) -- when the red man can get ahead, man -- (laughter) -- and when white will embrace what is right." Let all those who do justice and love mercy say Amen. Say Amen. And Amen.
To no surprise, Fox News and Glen Beck are leading the way. You can read even more nonsense in the comments sections of many a website or blog that ran the story, such as this one over at the Chicago Sun Times.

I find it shocking how uptight and ignorant many white Americans remain. Moreover, they can't handle what was obviously meant to be a light-hearted rhyme, quite possibly referencing an old blues song by Big Bill Broonzy (“Black, Brown, and White”).

If the average white person thinks they have embraced "what is right," then they should be outraged at the fact that those other folks with a certain skin pigmentation are mainly the ones who get pulled out of lines at airports for questioning -- or worse, "rendered" to places known and unknown to be tortured. The outcry from the average white person has been truly impressive -- not! How many white people have been rotting in such hellholes, courtesy the CIA and the Patriot Act?

I am not a determinist of any kind, but it is worth noting that a mainly white government has been waging a war of terror on brown and black people for almost eight years, on far away shores, the results often sanitized and hidden from view -- not unlike their previous wars against yellow people. Will electing a black president change all that? Certainly not. But one can hope -- to borrow that overused phrase -- that under watchful eyes, it may be a crucial first step to begin to reign in what Martin Luther King correctly labeled "the greatest purveyor of violence in the world -- my own government." No doubt America's countless innocent bystanders will welcome any degree of sanity in terms of US statecraft. It remains to be seen -- though early indications indicate business as usual.

Meanwhile, it is clear that much of white America still doesn't get it. Nor do you have to read far between the pixels to see that much of Red and Blue state America are still at war with each other, at least electronically. Fixing the culture war is just one more problem to tack onto Obama's gargantuan list.

Finally, I have a friend currently traveling and working in Africa, and here's what he has to say about how the Obama inauguration was received in Africa:

I am currently in Nairobi waiting for my travel documents for Southern Sudan to be processed.
Nairobi was absolutely wild last night. Big screens set up all over and free concerts to celebrate the inauguration of the native son.
Expectation and assertion that as a Kenyan he must take care of his people is rampant here. In fact since I was in Angola in November and recently Nigeria the furvor is shocking.
I thought you would like to know.


Gordon Brown brings Britain to the edge of bankruptcy

Iain Martin says the Prime Minister hasn't 'saved the world' and now faces disgrace in the history books

By Iain MartinLast Updated: 8:41AM GMT 21 Jan 2009

They don't know what they're doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.

Yesterday marked a new low for all involved, even by the standards of this crisis. Britons woke to news of the enormity of the fresh horrors in store. Despite all the sophistry and outdated boom-era terminology from experts, I think a far greater number of people than is imagined grasp at root what is happening here.

The country stands on the precipice. We are at risk of utter humiliation, of London becoming a Reykjavik on Thames and Britain going under. Thanks to the arrogance, hubristic strutting and serial incompetence of the Government and a group of bankers, the possibility of national bankruptcy is not unrealistic.

Peacenik has to ask again. Are Canadian banks really immune to the problems that are facing all the banks in England, Europe and the U.S? It is kind of hard to believe. As George Bush famously said, "This sucker is going down". If England become Iceland, what happens? And Peacenik's bird flu google alert is ringing off the wall. H1N1 is co-circulating with H5N1 in China right now. Before you head down to get your cash out of the bank you may want to re-read Peaceniks post about bird flu.

Ready To Do It Right Yet?

The banks, that is.

XLF (the financial sector spyder) yesterday, down 16.5%. That's impressive, but what's even more impressive is the loss in some of the components, to wit:

BAC, down 28.9%
Citigroup, down 20%
Goldman Sachs, down 18.9%
JP Morgan, down 20.7%
Morgan Stanley, down 15.9%
State Street, down 59% (!)
Wells Fargo, down 23.8%

Those are one day losses folks. In one day anywhere from twenty percent to more than half of these firms was wiped out. If you hold their stock, I hope you're prepared for what you see when you look online at your account.

Why did this happen?

Read on...

Peacenik half expected, along with everyone else, a brief inauguration rally in the markets. Instead the markets are one step closer to Armageddon. Looks like Obama isn't going to have a honeymoon period to think about solutions. His next step is crucial. On a slightly brighter note Obama ordered a pause in the military tribunals and a review of Bush's latest regulations. But the markets. Peacenik is nervous. Are you?


Canada bars '60s radical

Weather Underground co-founder William Ayers had been scheduled to give a lecture at U of T

Jan 20, 2009 04:30 AM

Debra Black

Weather Underground co-founder William Ayers, who made headlines last year during the U.S. presidential race for his controversial links to Barack Obama, was turned back at the Canadian border Sunday night.

The Weather Underground, a radical 1960s anti-Vietnam War group, was responsible for a number of bombings in the United States in the early 1970s.

Read on...

For crying out loud. Peacenik was looking forward to enjoying the inauguration. Peacenik was happy. Peacenik was feeling good. Peacenik should have stopped looking at the news. This is worse than embarrasing. It shows you what kind of country Canada has become under Harper. And that country is intolerant, petty, and vindictive. Someone should have intervened to prevent this from happening. Instead someone intervened to make it happen.

January 19 2009: Fight for your right to party

Ilargi: First of all, I don't want to deny anyone the right to a party. Still, as I said yesterday, I have the feeling that many people think that the higher the price-tag, the more the event will be enjoyed. I know from my own experience that this is not true. The best parties are the ones that come with the most spontaneity. In the case of Washington these days, spontaneity is nowhere to be found. We have to party, we must, because we are so desperate for change, because we need so badly for some person or some event to give us hope.

That's why we will party, for instance because Bush is gone, and we can project all bad things on the man, so the future looks cleansed of all evil, and we can in turn project all good things on the new man. To achieve that goal, we willingly forget that the foundations for the economic downfall that stresses us so much and feeds the grinding need for hope of any kind, were laid to a very large extent under a Democratic president, not under Bush. And that would still be alright, what lies in the past cannot be repaired, what's done is done and we need to do the best we can in the future that starts tomorrow.

Peacenik thinks today is a good day to forget all the bad news and just enjoy the inauguration. All the bad news will still be there tomorrow. The world will still be bankrupt. The Leafs will still stink. But today enjoy. Peacenik hopes you can find a tv feed to watch history. Cheers.


U2 @ Inauguration Concert

punditman says...This is one of Punditman's favourite songs.

Noam Chomsky: Undermining Gaza

mp3 here

Sponsored by MIT Center for International Studies.

Date Recorded: 2009-01-13

RBS issues global stock and credit crash alert

By Ambrose Evans-Pritchard, International Business EditorLast Updated: 11:55PM BST 19 Jun 2008

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Peacenik was a little late with Peacenik's stock market crash prediction. The Royal Bank of Scotland made its prediction in June of 2008. If investors had heeded RBS's advice, many would have avoided the market meltdown. In real time RBS just announced its own $41 billion dollar loss for 2008. Nasty to say the least. Its only Monday morning, its a U.S. holiday, but the bad financial news just keeps coming. Are the Leafs playing tonight? Is Punditman?

U.S. mortgage insurers press Ottawa to fully guarantee policies

January 19, 2009

U.S.-based mortgage insurance companies are pressing the federal government to fully guarantee their home insurance policies in the pending federal budget to expand their market and possibly help resuscitate Canada's struggling real-estate market.

According to people familiar with the lobbying campaign, two leading mortgage insurers, Genworth Financial and American International Group, are fighting to raise existing government guarantees of private mortgage insurance to 100 per cent from the 90-per-cent level that has been in existence since the late 1980s.

Such a move would make the federal government ultimately liable for all of the hundreds of billions of dollars in insured mortgage debt.

Reading this story this morning in the Globe and Mail almost made Peacenik's head explode. Peacenik can barely type. What is missing from this story? How about some background about how the U.S. insurers lobbied their ideological buddies in the Harper government to first allow insane lending policies in Canada. Polices that directly led to the housing fiasco that is at the heart of the world wide finanancial crisis. Oh, and no mention that AIG is bankrupt. AIG has received billions, Peacenik has lost track, of dollars in a bailout from the U.S. government. AIG is at the centre of the black hole of bad debt. It has so many toxic assests on its balance sheet that it may not survive. And here it is shamelessly lobbying the Canadian government to create policies that are proven to be bad. Peacenik needs to calm down. AIG needs to shut its pie hole.


This Miracle Brought to You by America’s Unions

By: emptywheel Friday January 16, 2009 5:34 am

They're calling it a miracle--the successful landing of a US Airways jet in the Hudson and subsequent rescue of all 155 passengers. They're detailing the heroism of all involved, starting with the pilot and including cabin crew, ferry crews, and first responders. What they're not telling you is that just about every single one of these heros is a union member.

There's the pilot:

What might have been a catastrophe in New York — one that evoked the feel if not the scale of the Sept. 11 attack — was averted by a pilot’s quick thinking and deft maneuvers.

On board, the pilot, Chesley B. Sullenberger III, 57, unable to get back to La Guardia, had made a command decision to avoid densely populated areas and try for the Hudson,

Read on...

Peacenik gets tired of all the anti-union bs in the media. Everyone wants to blame the autoworkers' unions for the problems of the auto industry. The whole goal of the Republicans in the U.S. is to let GM and the other companies walk away from their pension and benefit obligations and union contracts. Same with Harper and the CAW in Canada. This article by emptywheel makes an important point in a very simple way. Unions are good. Workers benefit from Unions. Society benefits from unions.

A Global Breakdown Of The Recession In 2009

Nouriel Roubini, 01.15.09, 12:01 AM EST

Forecasting pain, from the U.S. to Australia.

With the industrial world already in outright recession and the emerging world navigating toward a hard landing (growth well below potential), I expect global growth to be flat (around -0.5%) in 2009.

This will be the worst global recession in decades as the fallout of the most severe financial crisis since the Great Depression took a toll first on the U.S. and then--via a variety of channels--on the rest of the global economy.

Here is a global breakdown of my forecast.

Read on...

Peacenik was wrong. The stock markets didn't have a good week, but they also didn't collapse. In fact Friday morning the Dow and TSX are up slightly. But given the financial news this week it is tough to be optimist that the markets are going to rally much in the near future. In fact Roubini is calling the present modest rally a suckers rally. So as we head into the weekend Peacenik gives you Dr. Doom himself and his forecast. It is not good. If you want a good primer on why the bailouts will not work check out Dan's post at theautomaticearth. Have a good weekend.


Time to Fire Ken Lewis of Bank of America

Step right up to the bar here in Bailout Nation, 2009 version. Open 24 hours, we never close. No bailout too big, no investment/money pit too dumb. Yes folks, we can handle your bad assets, recapitalize your bank, no muss, no fuss. Yes, here in America, we cannot be bothered with things like plans and strategies and maximizing returns for taxpayers.That’s right, we avoid the planning, and pass the savings onto to you, the home viewer!

Really, how the hell did we ever win WWII?

So the horrific deal Citibank cut with Treasury was a blueprint, an example for the next foolish investment — and here it is: Bank America, a supposed good bank, that couldn’t wait to get their hands on Merrill Lynch, now a bad bank.

Is there any doubt that the black hole of bank debt can't be filled by taxpayer bailouts. Peacenik thinks its time to liqudate failed banks and nationalize whats left. And start charging a few people for any crimes that have been committed. The Dow and TSX continue their downward march towards new lows as Peacenik predicted on Monday. Who would hold stocks in this environment? Would you? Would Peacenik? A new bottom will form. But it will be closer to zero than the indexes are right now. Time to double check if your bank deposits are insured.


Citigroup Goes To Sleep

It's the end of the line for Citigroup. The "group" will soon be gone as Pandit Dismantles Weill Empire to Salvage the Bank Within Citi.

Vikram Pandit is unraveling his empire to save his bank. Citigroup Inc.’s chief executive officer said yesterday he would cede control of the Smith Barney brokerage to Morgan Stanley. Pandit may also dump the CitiFinancial consumer-lending unit, tag Tokyo-based Nikko Asset Management Co. for eventual sale and rein in trading with the bank’s own capital, people familiar with the matter said.

Some current and former Citigroup executives place the blame for the firm’s troubles on Weill. He refused to spend enough on technology and failed to integrate the new companies he acquired, say people familiar with the matter.

Peacenik can barely process all the bad financial news Peacenik is reading. Here is a story about the demise of Citigroup, one of he biggest banks in the world. It is broke. And the reaction of the media and the public? Yawn. The public has been inured to bad fiscal news now. Your bank is broke or going broke? Yawn. The Phoenix Coyotes are bankrupt? Yawn. Peacenik wonders when ATMs will suddenly stop functioning. Peacenik forgets how to bank in person. Does in-person banking still exist? Oh well, Wayne Gretzky is a great Canadian.

Asia-Europe Shipping Rates Drop to Zero

I know I sometimes go for hyperbole in headlines, but the statement above is accurate. Your humble blogger had expected China (and presumably the rest of Asian) trade to fall in January and February from already depressed levels. While the drop in Chinese exports for December was less than experts expected (imports fell more sharply than anticipated, however), the trajectory down appears to be steepening, as we had feared.

From the Telegraph (hat tip reader John O):

"They have already hit zero," said Charles de Trenck, a broker at Transport Trackers in Hong Kong. "We have seen trade activity fall off a cliff. Asia-Europe is an unmit igated disaster."

Shipping journal Lloyd's List said brokers in Singapore are now waiving fees for containers travelling from South China, charging only for the minimal "bunker" costs. Container fees from North Asia have dropped $200, taking them below operating cost.

Peacenik has been talking about the Baltic Dry Index for a while. The BDI and shipping rates are the arcane canaries in mineshafts that can't be ignored. The old global economy depended on growth. Growth is finished. Can the world adapt to a no growth future? Is Ron Wilson a bad coach? Peacenik doesn't know the answer to either question. But no shipping will mean no groceries on the shelves; no shipping will mean no brand new $300 made-in-China carbon hockey sticks each time some NHLer breaks one and misses an open net in overtime in an untelevised game in front of an empty arena. Oh well, Cliff Fletcher is a great Canadian.

War and Natural Gas: The Israeli Invasion and Gaza's Offshore Gas Fields

by Michel Chossudovsky

The military invasion of the Gaza Strip by Israeli Forces bears a direct relation to the control and ownership of strategic offshore gas reserves.

This is a war of conquest. Discovered in 2000, there are extensive gas reserves off the Gaza coastline.

British Gas (BG Group) and its partner, the Athens based Consolidated Contractors International Company (CCC) owned by Lebanon's Sabbagh and Koury families, were granted oil and gas exploration rights in a 25 year agreement signed in November 1999 with the Palestinian Authority.

The rights to the offshore gas field are respectively British Gas (60 percent); Consolidated Contractors (CCC) (30 percent); and the Investment Fund of the Palestinian Authority (10 percent). (Haaretz, October 21, 2007).

The PA-BG-CCC agreement includes field development and the construction of a gas pipeline.(Middle East Economic Digest, Jan 5, 2001).

The BG licence covers the entire Gazan offshore marine area, which is contiguous to several Israeli offshore gas facilities. (See Map below). It should be noted that 60 percent of the gas reserves along the Gaza-Israel coastline belong to Palestine.

The BG Group drilled two wells in 2000: Gaza Marine-1 and Gaza Marine-2. Reserves are estimated by British Gas to be of the order of 1.4 trillion cubic feet, valued at approximately 4 billion dollars. These are the figures made public by British Gas. The size of Palestine's gas reserves could be much larger.

Keep Reading...

punditman says...
What? I thought this was all about those Hamas rockets? Imagine my shock! When some international action appears to be totally insane, you can usually find oil and gas in the equation somewhere.


Pure Propaganda From the Papers of Record

by Philip Girardi

The Israeli propaganda machine has called up its allies in the media and Congress to make sure that no one will condemn the invasion of Gaza, which has killed and wounded thousands of Palestinians, most of them civilians and many of them children. The pictures of small bodies lined up to be buried are convincing evidence that something is very wrong in Gaza, but leaders in Congress from both parties have nonetheless rallied to the cause of Israeli victimhood, putting all the blame for the conflict on the Palestinians.

Folks outside the United States who do not have the benefit of the Israel lobby to guide their thinking are seeing the carnage in a different way, noting the disproportionate nature of the Israeli attack and also the unlikelihood that Tel Aviv's stated objectives are obtainable without utterly destroying Gaza's infrastructure and turning the strip of land into a military-occupied moonscape. Many are also wondering what Israel's actual goals might be, since the invasion will only empower Hamas politically, not destroy it. Is it to tie the incoming Obama administration irrevocably to Israel's security agenda or to strengthen the Kadima Party in the lead-up to national elections next month? Only time will tell, but, as always, the Palestinians will bear the brunt of the suffering, and the United States will surely pay some price for green-lighting the Israeli offensive.

The Washington Post, as always, has not been shy in its support of Israel. It has featured editorials and a preponderance of letters to the editor strongly supporting the Israeli position. No less than 11 opinion pieces by Israeli politicians Tzipi Livni and Ephraim Sneh, American professor Robert Lieber, Israeli academic Yossi Klein Halevi, Jim Hoagland, John Bolton, Michael Gerson, and Charles Krauthammer (twice) have all exonerated Tel Aviv in the current crisis and accused Hamas of being solely responsible. Referring to the invasion, Richard Cohen wrote last week that "It takes real stupidity to blame it on Israel." That shared the page with a piece by Anne Applebaum that asserted, astonishingly, that Hamas believes "the continuing firing of rockets into southern Israel will, sooner or later, somehow bring about the dissolution of the Jewish state." It is clear that complete ignorance of what one is writing about has never deterred anyone on the Post's opinion pages.

Keep Reading...

punditman says...

To paraphrase Chomsky, if all you rely upon is the mainstream media as your guide to what is happening in the world, your mind will be very impoverished.

Layoffs a complete surprise at Hitachi

Hitachi Construction Truck Manufacturing Ltd. trims workforce by 58 in response to economic downturn

January 13, 2009
Rob O'Flanagan
Mercury Staff


Late last year, Guelph-based Hitachi Construction Truck Manufacturing Ltd. was gearing up to expand its business, company and union officials said yesterday.

What a difference a few months makes.

The manufacturer of large-scale heavy equipment confirmed yesterday it is laying off 58 workers. The move is a direct outcome of the global reduction in accessibility to credit and slumping commodity prices, company chief executive Walter Fox said in an interview. The majority of the company's sales are outside North America.

Read on...

Stories like this make the hair on the back of Peacenik's neck stand on end. They strike too close to home. How many more hits can the Guelph economy take before there are widespread consequences? If the auto industry isn't making a comeback, will Southwestern Ontario get hollowed out just like Michigan? That's the Michigan where houses are now selling for less than a hundred dollars. And there still aren't buyers. Guelph and Southwestern Ontario need a plan now. Peacenik hasn't seen one.

Moscow Grocery Shelves Increasingly Empty

For a generation of Russians who queued daily in the snow for the most basic of staples, the symbolism of a bare supermarket shelf is so powerful that it could potentially destroy the reputation of Vladimir Putin, the prime minister, as saviour of the world's largest country.

The shortages are not yet widespread. Even so, goods have begun to vanish from dozens of Moscow supermarkets over the past fortnight.

At a branch of the supermarket chain Samokhval in southwestern Moscow, a handful of shoppers pushed their trolleys through empty rows of shelves that once groaned under the weight of imported wares.

Peacenik got this story from his "empty grocery shelves" google alert. These alerts make Peacenik increasingly nervous. Peacnik expects to track the geographic distribution of these alerts in the days ahead. Peacenik expects to track the alerts right around the world, right to Peacenik's corner store. Have you been to a grocery store today?

Meet Lady Subprime

By Richard CohenTuesday, January 13, 2009; Page A15

The French have the comely Marianne, the British have the fetching Britannia, and we have the welcoming Lady Liberty. May I now suggest, at least for the duration of the current recession, a new feminine emblem of our times: Marvene Halterman of Avondale, Ariz. At age 61, after 13 years of uninterrupted unemployment and at least as many years of living on welfare, she got a mortgage.

She got that mortgage less than two years ago. She got it even though at one time she had 23 people living in the house (576 square feet, one bath) and some ramshackle outbuildings. She got it for $103,000, an amount that far exceeded the value of the house. The place has since been condemned.

Read on...

If you're having trouble understanding how the world's finanical system got sucked into a black hole of derivative debt, this is a fairly readable explanation. This is why almost every financial institution in North America is bankrupt. Peacenik read a bunch of financial news yesterday and early today. It is all bleak. It is all bad. The only thing that will prevent Peacenik's prognostication about the markets from coming true is the small chance that there will be a small rally because of Obama's inauguration. A small short rally.


Israel Is Committing War Crimes: Hamas's violations are no justification for Israel's actions


Israel's current assault on the Gaza Strip cannot be justified by self-defense. Rather, it involves serious violations of international law, including war crimes. Senior Israeli political and military leaders may bear personal liability for their offenses, and they could be prosecuted by an international tribunal, or by nations practicing universal jurisdiction over grave international crimes. Hamas fighters have also violated the laws of warfare, but their misdeeds do not justify Israel's acts.

The United Nations charter preserved the customary right of a state to retaliate against an "armed attack" from another state. The right has evolved to cover nonstate actors operating beyond the borders of the state claiming self-defense, and arguably would apply to Hamas. However, an armed attack involves serious violations of the peace. Minor border skirmishes are common, and if all were considered armed attacks, states could easily exploit them -- as surrounding facts are often murky and unverifiable -- to launch wars of aggression. That is exactly what Israel seems to be currently attempting.

Israel had not suffered an "armed attack" immediately prior to its bombardment of the Gaza Strip. Since firing the first Kassam rocket into Israel in 2002, Hamas and other Palestinian groups have loosed thousands of rockets and mortar shells into Israel, causing about two dozen Israeli deaths and widespread fear. As indiscriminate attacks on civilians, these were war crimes. During roughly the same period, Israeli forces killed about 2,700 Palestinians in Gaza by targeted killings, aerial bombings, in raids, etc., according to the Israeli human rights group B'Tselem.

Keep Reading...

punditman says...
Notably, this appears in the Wall Street Journal. A chink in the armour of mainstream media orthodoxy, perhaps?

Obama on Torture: Don't Stop Thinking About Tomorrow

posted by Ari Melber on 01/12/2009 @ 11:22am

The Obama administration will not focus on prosecuting government officials who practiced illegal torture or war crimes, the president-elect said on Sunday, though he added that prosecutions and independent commission have not been completely ruled out. This was Obama's first major statement on the issue since April; over the past few weeks, Obama's aides have repeatedly ducked questions about what, if anything, the administration will do to enforce laws violated by officials under President Bush. The question topped the list of citizen concerns on Change.gov last week, out of over 70,000 submissions, but Obama aide Robert Gibbs refused to respond, leading ABC's George Stephanopoulos to press the question during an interview on his Sunday show.

"My orientation's going to be to move forward," Obama said. The attorney general has to stay above politics and "uphold the Constitution," Obama added, but his administration will focus on "getting things right in the future as opposed to looking at what we got wrong in the past."

Read on...

Peacenik doesn't think ignoring war crimes is focusing on the future. Nor is it staying above politics. Of course the media hardly questioned Bush about torture for eight years. And the media accepted Bush's lame use of semantics to deny that the U.S. used torture. Looks like widespread criminal behavior is just going to get ignored. On Wall St. and in the Whitehouse.

On "Hyperinflation"

Let's put this to rest right here and now.

"Hyperinflation", or even "Serious Inflation" (similar to what we had in the 1970s) is impossible without a means to transmit the rise in prices into wages.

In today's United States that simply cannot happen for two reasons:

Karl Denninger weighs in on the inflation/deflation debate. Peacenik tends to agree that hyperinflation doesn't appear to be imminent. Which means inflating away your's and the contry's debt isn't going to happen soon. Yesterday, after a few beers, Peacenik made the bold prediction that the stock markets would crater this week. How much bad news can investors take? How much crime can investors ignore? Right now the TSX and Dow are both red. What constitues a crater? Peacenik says new lows on both indexes. And more beer for everyone.


War Resister Ordered Out

Immigration officials inform American soldier that she must leave by Jan. 27 or face deportation

by Paola Loriggio

When Kimberley Rivera shipped out to serve in Iraq with the U.S. Army in the fall of 2006, she saw herself rebuilding homes, feeding the hungry and helping children.

Barely three months into her 15-month mission, Rivera, a gate guard in Baghdad, had had enough.

A young mother herself, she says she was haunted by the sight of children crying, forever traumatized by the war.

Read on...

Peacenik is almost afraid to check out the stance of Ignatieff on whether war resisters should be allowed to stay in Canada. This is a litmus test for the Liberals. The Liberals can stop this and future deportations. Will they do it? Peacenik hopes so.

Robert Fisk: Why do they hate the West so much, we will ask

So once again, Israel has opened the gates of hell to the Palestinians. Forty civilian refugees dead in a United Nations school, three more in another. Not bad for a night's work in Gaza by the army that believes in "purity of arms". But why should we be surprised?

Have we forgotten the 17,500 dead – almost all civilians, most of them children and women – in Israel's 1982 invasion of Lebanon; the 1,700 Palestinian civilian dead in the Sabra-Chatila massacre; the 1996 Qana massacre of 106 Lebanese civilian refugees, more than half of them children, at a UN base; the massacre of the Marwahin refugees who were ordered from their homes by the Israelis in 2006 then slaughtered by an Israeli helicopter crew; the 1,000 dead of that same 2006 bombardment and Lebanese invasion, almost all of them civilians?

What is amazing is that so many Western leaders, so many presidents and prime ministers and, I fear, so many editors and journalists, bought the old lie; that Israelis take such great care to avoid civilian casualties. "Israel makes every possible effort to avoid civilian casualties," yet another Israeli ambassador said only hours before the Gaza massacre. And every president and prime minister who repeated this mendacity as an excuse to avoid a ceasefire has the blood of last night's butchery on their hands. Had George Bush had the courage to demand an immediate ceasefire 48 hours earlier, those 40 civilians, the old and the women and children, would be alive.

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punditman says...

Here are some choice quotes from Peter Kent, Canada's Minister of State for Foreign Affairs (Americas) as he summed up the Israeli strike on the UN school:
"Hamas bears the full responsibility for the deepening humanitarian tragedy."
We really don’t have complete details yet, other than the fact that we know that Hamas has made a habit of using civilians and civilian infrastructure as shields for their terrorist activities, and that would seem to be the case again today,” he said in an interview.
In many ways, Hamas behaves as if they are trying to have more of their people killed to make a terrible terrorist point.”
Meanwhile UN officials say they had passed on the school’s GPS co-ordinates to Israel and that it was clearly marked with a UN flag. Furthermore, they insist that only civilians had sought refuge at the school. The UN is demanding an investigation.

Peter Kent the journalist should really do his homework before shooting off his mouth as Peter Kent the junior neo-con politician.


Israel's Monopoly on Psychological Suffering: The Trauma Vortex


Based on the tallies currently being produced by Israeli towns located in the haphazard line of Qassam rocket fire, it appears that the bulk of Israel's civilian casualties in its war on Gaza will once again be shock related.

This was the case in the July 2006 war on Lebanon, during which the Israeli Health Ministry reported that 4,262 wounded Israeli civilians were treated in hospitals; this total was broken down into 33 seriously wounded patients, 68 moderately wounded, and 1,388 lightly wounded, with the remaining 2,773 treated for "shock and anxiety." The UN Commission of Inquiry on Lebanon, meanwhile, cited the Lebanese authorities' claim of 4,409 wounded Lebanese civilians—the only attempt at classification of casualties being a chart listing 56 different "collective massacres" conducted by Israeli forces during the war, with identifying labels such as: "Air raids struck heavily on the funeral procession of the victims of the previous day['s] air raids."

BBC News reported different figures in its August 2006 civilian casualty scorecard for the war, according to which there were 32 seriously wounded Israelis, 44 moderately wounded Israelis, 614 lightly wounded Israelis, 1,985 Israelis treated for shock, and 3,697 wounded Lebanese. Israeli casualties were thus still overwhelmingly shock related, while the Lebanese were still:

  1. a lump sum.
  2. not affected by acute stress disorders.

The same trend will most likely hold for Gaza—and not only because it is difficult for hospitals to accommodate people with heightened norepinephrine levels when they cannot accommodate people with missing limbs.

I awoke this past Sunday morning to find that 1 Israeli in Sderot had been lightly wounded, 4 Israelis had been treated for shock, and 23 Palestinians had been killed in Gaza since midnight. After performing a Google search of the terms "Palestinians treated for shock"—which mainly produced articles about Israelis being treated for shock due to Palestinian behavior—I phoned a Palestinian friend in Lebanon in an attempt to determine why enemies of Israel did not enjoy the luxury of psychological conditions. The investigation was conducted in modified English, the idiomatic form on which Hassan and I relied for all of our communications:

ME: Do Arabs ever go to hospital for problem with head?
HASSAN: Arab he don't have head.

This hypothesis would undoubtedly have been endorsed by ex-Israeli premier Golda Meir, who might have used it to back up her argument that Palestinians were not real people. Other possible excuses for the traditional embargo on Palestinian shock included the following:

  1. The Palestinians were used to having bombs fall on their heads.
  2. It was the Palestinians' own fault that bombs were falling on their heads.
  3. Shock had become the exclusive property of Israel's international sympathy campaign, as had the words "hail," "shower," and "barrage."

The Health section of Sunday's online edition of the Jerusalem Post offered some insight into the unique phenomenon of Israeli shock. The main article was entitled "Escaping the trauma vortex," which—although it sounded more like instructions for breaking down the Rafah border crossing—turned out to be the goal of Somatic Experiencing (SE), a self-healing philosophy that had recently been advertised in Sderot.

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punditman says...

This is long, but worth reading all the way through. With a sarcastic tone that bites, the author deals with the transparent double standard and racism applied when it comes to the very real psychological suffering amongst both Israelis and Palestinians. Punditman thinks that one sure way of stopping future psychic traumas on both sides is to end the subjugation of the Palestinians. In the jargon of alternative therapy, that requires a holistic approach, in stark contrast to the propaganda model that favours treating symptoms rather than the actual disease. And that disease has a name: Oppression.

Financial Forecast for 2009, Considering Resource Limitations

Posted by Gail the Actuary on January 6, 2009 - 10:10am

In this post, I consider some major issues contributing to our current financial problems, before making a financial forecast for 2009. These are

1. Why so many asset classes are so highly correlated in times of distress. This chart gives my interpretation of part of the problem.
2. Why growth is essential for keeping the current debt-based financial system operating.
3. Where we are now, and the role reduced resources (including peak oil) are likely to play as we go forward.
4. My forecast for 2009.

Read on...

This is a long but worthwhile post. Peacenik particularly enjoyed many of the comments. Lots of back and forth on the inflation/deflation debate. And lots of good advice on what to do to prepare for the future.

Peacenik likes Citizen_Anarchists advice in the comments: "2. Take all the cash except for 2 years worth of payments,and turn it into solid tangible goods. Minimum 1 year food and water. Preferably more. Silver coin, some gold coin and a few other hard metals of value. Buy as much tradeable supply as possible, be it ammo, guns, farm tools, livestock that can be boarded at remote farm, seed ,booze, meds, etc. Find a safe place out of any large city to keep most of it. Friend or family, even locked storage will work.

Buy the most fuel effecient ICE small car you can find. Honda FIT or VW Rabbit TDI. Pay cash for it. Do not buy a Hybrid. Buy a small quality trailer to pull with it and learn how to use it. Buy a few years worth of spare parts, tires, oil and filters. Gas WILL be available on and off for a few years, but buy a few good bikes with spare parts. . Easy to trade as well. Quality counts much more than quantity in all your tangibles." Citizen_Anarchist is not a Jehovah's Witness. He works for FEMA. Peacenik hopes Citizen_Anarchist is over-the-top.

Music Sales 2008

Music sales are following the trend established over the oast several years: Digital Sales Up, Physical unit sales down, and overall revenue sliding further.
• Total album sales fell to 428.4 million units, a drop of 8.5% (2007 = 500.5 million).
• Physical album sales fell 20% to 362.6 million (from 450.5 million)
• Digital album sales rose 32% percent to 65.8 million units;
• Digital track sales were up 27%, breaking the 1 billion mark for the first time at 1.07 billion.
• Total transactions rose 10.5% to 1.5 billion;
• All Genres saw losses: Classical music dropped 26%; Country fell 24%; Latin was off 21.1%;
• Vinyl album sales also grew with 1.88 million vinyl albums purchased for the year.

Read on...

Peacenik was surprised to see that Neil Diamond is still alive.


Scenario 2020: The Future of Food in Mendocino County

Posted by Jason Bradford on January 5, 2009 - 9:27am

Why weren’t the trucks running? I’ll give a quick overview of what led up to the Little Death.

Let’s start with the credit market break down in 2008. What followed was a plunge in the volume and reliability of global trade. Without access to the free flow of credit, countries experienced food and fuel shortages. People began rioting.

We saw how developing countries were in profound crisis, but most of us didn’t imagine how those awful scenes would so quickly be in our own neighborhoods too.

Everyone knows the story…Pakistan devolved into anarchy and was unable to keep all of its nuclear weapons secure. Several went missing and the world didn't find out where they went until it was too late.

South-Central Asia and the Middle East were on fire.

Read on...

Peacenik likes reading futuristic scenarios. This one by Jason Bradford highlights what will happen to food supplies in the event of oil shortages. Peacenik's Google Alert for empty grocery shelves continues to alert but not alarm. Is it worth stockpiling food if looters loot? Is it worth stockpiling if everyone has to redistribute their food? Is hoarding bad? When the grocery shelves do empty, where do you want to be? Peacenik thinks Guelph, with a large Amish community nearby, is a good place to be. Peacenik's solar flashlight is fully charged.