Here's my Top 10 links from around the Internet at 7 pm in association with NZ Mint.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
I'll pop the extras into the comment stream.See all previous Top 10s here.
All a bit frantic today with the Fed's Twist (check out the music videos below), dud GDP, Roost Home Loan Affordability and Fonterra result. Hopefully tomorrow 'tis a little quieter...
1. Peak oil rebuttal rebutted - IHS Cambridge Energy Research Chairman Daniel Yergin wrote a very grumpy piece in the Wall St Journal this week questioning the thinking and evidence behind the Peak Oil idea.
Here's Yergin:
This is actually the fifth time in modern history that we've seen widespread fear that the world was running out of oil. The first was in the 1880s, when production was concentrated in Pennsylvania and it was said that no oil would be found west of the Mississippi. Then oil was found in Texas and Oklahoma. Similar fears emerged after the two world wars. And in the 1970s, it was said that the world was going to fall off the "oil mountain." But since 1978, world oil output has increased by 30%.
Just in the years 2007 to 2009, for every barrel of oil produced in the world, 1.6 barrels of new reserves were added. And other developments—from more efficient cars and advances in batteries, to shale gas and wind power—have provided reasons for greater confidence in our energy resiliency. Yet the fear of peak oil maintains its powerful grip.
So James Hamilton at Econbrowser responded with pretty reasoned argument, I think.
Although it is true that global production did not fall between 2005 and 2010, it is also accurate to observe that it did not grow very much, rising only 2.2 million barrels/day (which represents 2.6% of 2005 levels) over these 5 years. Over these same 5 years, China increased its consumption by 2.5 mb/d. Thus, although the world did produce more, everybody in the world outside of China had to make do with less.
I submit that meeting the growing global demand for crude oil over the last five years has posed significant challenges for the world economy. And those who worry that the next 5-10 years might be like the last should not be dismissed as crackpots.
Hear hear. I'm with Hamilton on this one.
2. Chinese debt - US hedge fund manager Jim Chanos talks at Bloomberg about Chinese debt rising to "European type numbers" of 200% of GDP.
"The property market is hitting the wall right now."
He's short the Chinese banks and property developers. He's long the Macau casinos. "It's our long corruption, short property play."
3. China and America play chicken - As the stress grows, the trade wars will come, if they're not here already. BBC reports on US moves to take China to the WTO over chicken meat imports.
Other recent US filings to the WTO include complaints about steel product duties and wind power subsidies. "China must play by the rules," said US Trade Representative Ron Kirk.
He said import duties imposed by Beijing last September have ruined a market that had been worth $1bn (£636m) to the US, putting 300,000 agricultural jobs at risk.
"We will not stand still if we believe that China has violated its commitments as a WTO member and is therefore threatening American jobs," said Mr Kirk.
China was one of the top two markets for US chicken exports before the tariffs were imposed. The other was Russia.
4. No wonder the Australians are grumpy - The Age reports a quarter of Australian home owners are now suffering mortgage stress.
The number of homeowners facing mortgage stress has jumped to 25 per cent from 21 per cent in June, mortgage insurance provider Genworth Financial said in its September Homebuyer Confidence Index, based on surveys conducted from July 30 to August 5, and released today.
‘‘Current economic uncertainty and increases in living costs have seen stress rise to unprecedented levels in the six months to September 2011,’’ the report said. ‘‘No previous survey has seen mortgage stress levels hit 25 per cent, not even during the depths of the GFC (global financial crisis).’’
In its report, the I.M.F. said that some European banks would need fresh capital as insurance against losses stemming from the debt crisis, and some weaker banks might need to be “resolved” or shut down. Taxpayers may again be called on to bolster the banking system, the I.M.F. said.
“Any capital needs should be covered from private sources wherever possible, but in some cases public injections may be necessary and appropriate for viable banks,” the fund said.
One of the most damaging side effects of the crisis has been a reluctance by banks to lend to each other because of doubts about each other’s solvency. The E.C.B. took further steps to address that problem Wednesday, saying it would ease the terms on which it lends to banks at low interest. Most banks must continually refinance their long-term obligations, and some would collapse without access to short-term credit.
The central bank said it would expand its definition of the collateral that banks can provide to receive central bank loans at the benchmark interest rate, which is 1.5 percent. The E.C.B. dropped a requirement that securities placed as collateral should also be traded on an official exchange.
6. Now the Slovakians are revolting - Yesterday it was Slovenia that was balking at the idea of expanding its bailout for Greece. Now Der Spiegel reports Slovakia is reconsidering the Greek bailout too and provides this excellent chart below. Click on the chart for a legible version.
Slovakia is obligated to contribute some €7.7 billion ($10.9 billion) to the euro-rescue fund. It's a hefty sum for the formerly communist country with a mere 5.4 million inhabitants. At the moment it is highly unlikely that Radicova can rally a parliamentary majority to support the plan.
In Brussels the Slovaks are already notorious for their lack of solidarity. A year ago the prime minister and subsequently the parliament rejected calls to provide any financial help for Greece . Slovakia has put up with painful reforms "without being given a cent," the prime minister argued back then.
7. Debunking the Cul-de-Sac - The Atlantic does a nice job of documenting the growing disillusion with the modern American penchant for sprawling suburbs riddled with Cul-de-Sac. Your thoughts Hugh?
In particular, traffic engineers found Cul-de-Sacs were not as safe for motorists as traditional grid pattern cities.
In their California study, Garrick and Marshall eventually realized the safest cities had an element in common: They were all incorporated before 1930. Something about the way they were designed made them safer. The key wasn’t necessarily that large numbers of bikers produced safer cities, but that the design elements of cities that encouraged people to bike in places like Davis were the same ones that were yielding fewer traffic fatalities.
These cities were built the old way: along those monotonous grids. In general, they didn’t have fewer accidents overall, but they had far fewer deadly ones. Marshall and Garrick figured that cars (and cars with bikes) must be colliding at lower speeds on these types of street networks. At first glance such tightly interconnected communities might appear more dangerous, with cars traveling from all directions and constantly intersecting with each other. But what if such patterns actually force people to drive slower and pay more attention?
“A lot of people feel that they want to live in a cul-de-sac, they feel like it’s a safer place to be,” Marshall says. “The reality is yes, you’re safer – if you never leave your cul-de-sac. But if you actually move around town like a normal person, your town as a whole is much more dangerous.”
8. An alternative to Barack Obama - Washington Monthly says the left in America is beginning to wonder if Elizabeth Warren would be a better Democratic candidate in next year's elections than the current President, who seems captured by Wall St and a pushover for the mad Republicans in Congress. Here's a sense of what Warren would say.
She comes across as passionate and sensible. She is one of the few in America's political system who has fought Wall St consistently and coherently.
Here's a taste:
“I hear all this, you know, ‘Well, this is class warfare, this is whatever,’” she said. “No. There is nobody in this country who got rich on his own. Nobody.
“You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.
“Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
9. Watch out for a China slowdown - Bloomberg reports The HSBC-Markit flash measure of China's Purchasing Managers Index, a key measure of factory output, showed the third month of contraction running.
The Hang Seng fell 4% this afternoon, the most it has fallen since 2008. Most of the experts still think China can manage a soft landing. Here's hoping. Copper prices are down 20% since February, by the way.
Today’s data adds to evidence the world’s second-biggest economy is slowing after the central bank raised borrowing costs and curbed lending to cool inflation. China has joined policy makers in other Asian economies including South Korea and Malaysia in pausing monetary tightening as a deepening debt crisis in Europe and the risk of renewed recession in the U.S. threaten to stall a global recovery.
10. Totally a video of Chubby Checker's version of the Twist. Great sax.
11. Totally The Beatles' version of Twist and shout. Great rasp in Lennon's voice.
46 Comments
RE: 10 Geez Bernard totally immoral music, are you trying to corrupt us all.
You can throw in Euan Mearns as well in a response to Yergin (Check out Yergins track record for predicating the price of oil - woeful)
Yergin has even got a measure for oil 1 Yergin is USD$38 for a barrel of oil - We are up to around 3 Yergins now I believe. (thereabouts)
Anyway Mearns piece
- Global oil production (crude + condensate + natural gas liquids: C+C+NGL) has been on an 82 million barrel per day plateau for 7 years despite record high oil price, deployment of technology such as horizontal wells and 3D seismic, the development of new oil provinces such as offshore Angola and unconventional play concepts such as the Bakken shale in North Dakota. Oil production rose during the great oil bear market from 1980 to 1998 but has largely stagnated during the great bull run ever since. Many things are upside down on the back side of Hubbert's peak.
Great link Blair. Cheers
Bernard
Re 1. I can see why you'd go with him, BH, he's an economist. He doesn't get that the quality is falling (since 2005 we've been drilling deeper, further offshore, water-cutting more, fracking more, using 'sourer' oils, and drilling more dud wells.
Beyond that EROEI issue (which says the calorific content has stayed constant since about 2005, if you subtract the true energy input) there's 'net export'. There's a young Saudi student here at Otago Uni, who did her study into Saudi internal consumption, vs production. Her graph coincided with what others (Jeffery Brown / Sam Foucher the best of them) have already pointed out; Saudi Arabia will be consuming her total output by 2030, on current trends.
Re 8 - She's a bit awesome, if that clip is indicative. Better late than never.
PDK
Is your student's study public and/or published?
cheers
Bernard
I'll be at a lecture with her tmrw - will ask.
Meanwhile - an oldie but a goodie:
http://www.energybulletin.net/node/38948
figure 4, I think.......
cheers
This very disturbing consumption trend has been signalled by the KSA for some time.
Saudi Arabia is consuming up nearly a third of its crude oil output and supply could fail to meet domestic demand in 2030 if the high consumption trends are maintained, according to a government report.
http://www.emirates247.com/news/region/saudi-alarmed-by-high-oil-demand-2011-06-19-1.403349
He's been clueless for years IMHO....Its quite interesting though that just about everyone else who studies this (I cant think of anyone else who has not actually) has come around to peak oil is about now except for these guys.....
regards
Cul-de-Sac's are anti people and human scale mobility.
Grid network designed for people and horse transport - a lower order of speed. Back then they didn't even bother with give ways or stops. Speeds was at such a pace - that you would navigate your own way largely through the intersection. Look at any photo from 100 plus years ago.
Cars and the primacy of them in the 20C has lead to a distortion in what the public space provided in the 17th-19th C could be used for. So much so - that it is hard to not think of them for anything but the car and all other uses have been pushed to a narrow margin at the side.
Give me grids and human scale options anyday.
Walk to work - and always happy to talk and say good morning - with other non car commuters.
@blairmrogers
I've got a billy-goat I'd like to either cul or de-sac.........
hehehe...our rabbit is getting that "accident" soon.....makes me wince just thinking about itand its not me getting done....
:/
regards
Auckland should be looking at this rather than a billion $ rail system. These cost less than NZD10 per Km, electically powered, low running cost, can go to different destinations on a network and go 40 km / hr.
http://www.telegraph.co.uk/technology/technology-video/8770070/Personal…
There's a guy (assumption the rider is male, hard to see) that commutes in one of these each day from the Hutt Valley to Wgtn.
I am pretty sure that they are only for the executive car parks for rich people or those on expenses. Heathrow is a joke, hard to get to and get around, typical UK legacy Infrastructure. They actually look funny as well. A very uncool form of transport. A massively expensive waste of money so that rich people do not have to mix with everyone else. Singapore does this better with dedicated first and business terminal at Changi. The rich are splitting off completely from the rest of us. Reminds me of a story told to me by a Mum with a child at the same school as one of the Glaser children in LA. The Glaser Mum said that she was a bit concerned when they went to the airport her teenage daughter became concerned at all the people and asked who they were. Turns out they always flew in the private jet and this was the first time she had been to a real airport in her life- true story.
Glasers own Man U etc
They are starting with the business carpark, probably because it is closest to T5.
"The £25m scheme is being tested at Terminal Five before its use is considered across the rest of the airport"
http://news.bbc.co.uk/2/hi/uk_news/england/london/8194698.stm
The beauty of these pods is they can extend their network by just putting in guideways that consist of as little as two parallel rows of concrete barriers and reprogram the pods with the new network. Wikipedia says that if the system is successful they will expand to the rest of the airport with 400 pods.
http://en.wikipedia.org/wiki/ULTra_%28rapid_transit%29
The articles indicate the pods are free because they replace the carpark shuttle buses.
They use a lot of concrete....etc.
cul-de-sacs are fine if used in moderation, especially useful in parts of a site with steeper topography
I would agree though that schemes dominated by cul-de-sacs have serious flaws
The eurosceptics were utterly right, boasts Peter Oborne and Francis Weaver in The Telegraph...
And the FT was utterly wrong...sort of fun to read...
There's an acrid whiff of triumpalism about the same thing. A very posh sort of Nyah nyah nyah nyah nyah...we woz right, u woz wrong...
http://www.telegraph.co.uk/finance/comment/8780075/The-great-euro-swindle.html
Let's examine the case of the Financial Times, which claims to be Britain's premier economic publication. About 25 years ago something went wrong with the FT. It ceased to be the dry, rigorous journal of economic record so respected under its great postwar editor Sir Gordon Newton.
Turning its back on its readers, it was captured by a clique of left-wing journalists. An early sign that something was going wrong came when theFT came out against the Falklands invasion. Naturally it supported Britain's entry to the Exchange Rate Mechanism in 1990. In 1992, it endorsed Neil Kinnock as prime minister. It has been wrong on every single major economic judgment over the past quarter century.
Cash, cash everywhere, but not a drop to invest...
Here's MIT with research showing publicly listed companies are increasingly issuing shares and then holding on to the cash...
http://mitsloanexperts.com/2011/09/20/corporations-hoard-cash-as-a-precautionary-measure-2/
Academic studies have shown that over the past few decades, public firms are increasingly holding large amounts of cash. Curiously, much of this build up in cash savings can be attributed to cash saved from seasoned share issues, which are sales of equity by already public companies.
I examined the share-issuance cash savings of a large number of U.S. firms over a 38-year period. In the 1970s, $1.00 of issuance resulted in $0.23 of cash savings, yet in more recent years, that same $1.00 of issuance resulted in $0.60 of savings. Over my sample period, the amount of cash saved from share issuance increased at an average rate of 2.5% per year.
Bullion vaults are running out of space. Hoarders are gathering everywhere...
but hoarding for the wrong reason (inflation) I think....
regards
Paul Brislen at TUANZ points to some interesting links building between a Chinese bank and Iwi groups over a new optic fibre investments.
This week, however, out of left-field, came news that aChinese consortium called Axin has not only the interest in connecting Australia with New Zealand but has backing and will have a boat in the water by the end of the year.
On the surface, this is a bolt out of the blue and the obvious questions have all surfaced. Why would a Chinese bank be interested in connecting Australia with New Zealand? What experience do they have in this technology and where did they spring from?
Axin is no stranger to New Zealand however. While they’retalking with Kordia about its role in the new cable, perhaps with a view to merging the two projects, they’re also involved in the Taitokerau network project which I wrote about last week. Three Axin staff attended the launch and expressed their keenness for the project. Maori culture has a lot in common with Chinese culture in regard to putting family before everything else, they said, so it makes sense for Chinese and Maori to work together. Both are taking the generational view of Taitokerau’s ability to make a return on investment, both see value in up-skilling and educating the community they serve and both are in it for the long haul.
Interesting musings here on Angrybearblog on the nature of capital accumulation, the problem of hoarding and the need for progressive taxation rates
http://www.angrybearblog.com/2011/07/investment-consumption-and-progressive.html
If we had to constrast the 50s and the 80s in terms of the consumption patterns of the near the top level of capitalists and managers we see a lot less conspicuous consumption among the former than we do in the post Reagan-era. In the 50s and 60s only Greek shipping magnates could afford the kind of consumption patterns that became common in before, during, and after the Enron era and certainly continuing today. From my perspective all Supply Side did was to lower the cost of consumption in pre-tax dollars, purchases that were inconceivable in the days of 90 and then 70% top rates have become routine in the days of 15%.
Which suggests that the current neo-liberal surrender to the idea that any increase in tax on capital inevitably will lead to disinvestment, almost as if it were an accounting identity, when history suggests the effects are the other way around, capitalists wanting to maintain the same level of consumption in a higher tax environment simply needing to intensify their re-investment rather than lazily take those gains out in the form of salaries, bonuses, and dividends.
Yep.
regards
And more ways for the super rich to consume and hoard at the same time.
Diamond producer De Beers expects global demand growth for rough diamonds to set a new record this year on the exceptionally strong performance of its key U.S. market and robust demand in China and India, the head of the company's distribution arm said.
Despite global volatility and concerns that the global economy is sliding toward another financial crisis, demand for diamonds was unlikely to be badly impacted because of its safe-haven appeal, Diamond Trading Co (DTC) Chief Executive Varda Shine told Reuters in an interview on Monday.
And those who do have money to spare are too scared to invest or spend it...
http://articles.latimes.com/2011/sep/17/business/la-fi-low-yields-banks-20110918
Consumers worried about the economy are pumping cash into checking, savings and money market accounts. But the banks don't need their money and have slashed interest rates to discourage customers.I live in one but close enough to a main drag to hear the hoons roaring up the hill.....so Im glad im in a cul-de-sac myself.....less speeding.
regards
#8 Elizabeth Warren
Just brilliant,
Yep, she's brilliant;
Elizabeth Warren: The Coming Collapse of the Middle Class:
http://www.youtube.com/watch?v=akVL7QY0S8A
I think its collapsed already.....its hollowed out by debt.....it will take it a decade+ to recover once things are 'fixed" and the Republicans are determined never to see that happen....and peak oil will make sure they wont.
regards
I think the plural of cul-de-sac is culs-de-sac.
Anyway ... Bernard, will you be asking for one of these for Christmas? Would go well on the wall at the offices of interest.co.nz
judging from the monotonousity coming from one, maybe they're just dead ends.
But then, stats is all about eliminating the noise.
:)
cars need petrol, in the future there will be less petrol and it will be expensive.....so dinosaurs ignore the demise of teh car.....
The (to late) cost signals the Govn of the day is so fond of will see to that.
regards
Hugh - economic, as of this last few years, is no longer the yardstick. Shortly, I suspect there will be so much defaulting cascading along, that the values of much we have taken for granted, will be up for scrutiny.
The 20-something generation are surely cottoning-on, every where I look, they're hitting the ground running.
Cars? I was a petrol-head once, Hugh. I've hill-climbed, navigated (2nd generation, Dad navigated for Sybil Lupp in the Sundstrum - they won - , using two slide-rules, one set to the non-standard tyre ratio!). I have a vintage crawler I know every nut and bolt of, we have a vintage MG ditto, and out the window I can see the International camper with the 6.2 Chevvy V8 shoehorned into it. The Hino Contessa with the Alfa Romeo 2 litre with the Brabham cams and the side-draft DCOE45's, sadly it's gone now., as is the old x-2.
But
That doesn't alter what I know from my studies - they're doomed to be seldom-moved museum pieces. The suburbia that grew up around them, well, we have to have that discussion. Is the 1/4 acre backyard valid, food-wise post oil? Or should we claim back some of the carriage-way for that (listen to Michael Mobbs last night on RNZ). What size will the hubs/nucleii be? Presumably a trip's worth apart - but what trip? Electric train? Bike?
Most folk who contemplate this, fall at the first hurdle, and think in terms of 'getting to work', presumable in some current CBD. Who says that's going to happen?
Interesting times, Hugh. You should visit next time you're down this way. It's not a cul-de-sac, but it is a dead-end drive. There's going to be a lot of them around.....
Is it really that the Euro is in trouble because banks gamed the system rather than there being something acually inherently wrong with a single currency in europe, for 100s of years in the past there was a single currency in Europe. Thebanks pumped money into bits of Europe that could not handle it- creaing a massive wave of inflation making t countries uncompetitive. If is the fault of the Euro itself why does the Uk have different currencies for the North, London, Wales etc
Maybe the Euro is a symptom rather than the actual problem, giving up control of the money supply to banks could be the problem. I think it is the problem for NZ, we have ended up with massive inflation, low savings, incresaed inequality. not enough transactions to sustain the population etc. Maybe all of this could be put down to Don Brash and Co allowing very large, foreign owned private financial interests to dominate our society.
PlanB - there's a lot of chooks running round as if their heads were cut off. 99% of them don't know anything at the best of times, and they certainly don't nuderstand what the real problem is.
That fellow in #1 above, gets some of it.There hasn't been any more energy going into the Western world since 2005 - but prices are 3 times greater. Everything that happens, happens with oil - food, manufacturing, transport, plastics, concree, roads - so anyone betting on growth has to be, on average, a loser.
That includes banks, 'investors', fund managers, shareholders. The more their exposure is spread - contrary to popular belief - the more they succumb to the law of averages.
They still have no idea what is wrong. It was 'The Sub-Prime', now its 'Greece'. It is and was, neither.
Interesting times.
Commodities are in freefall, looks like BNP Paribas is rolling.
http://finviz.com/futures.ashx
>>>>>>>
The reality is that an hour ago, news that Qatar is in talks with BNP Paribas on taking a stake in the troubled bank was confirmed – and a cash for equity swap would not be on the table if the bank’s affairs were hunky-dory. This has echoes of Barclays’ dash for capital (in order to avoid a Government bailout) in 2008.
Just 48 hours ago, Beijing cut the rope on BNP. Now it’s in Qatar with equity on the table. It’s asking for the State to pile in with liquidity injections. And now it transpires that South African regulators have delayed its licence to provide banking services there because of doubts about its financial stability.
Never listen to what people in a corner say: always watch the moves they make. That’ll be a much clear guide to what’s really going on.
>>>>>>
Hugh, no one is really interested in the world beyond - Fonterra, the RWC and John Key are going to save NZ. Sleep well Bernard et al.
But for any contras, a selection from reality:
DJIA: http://finviz.com/futures_charts.ashx?t=YM&p=m5
Trend in wheat Futures: http://finviz.com/futures_charts.ashx?t=ZW&p=h1
You are being too kind.
John Key seems to be engendering widespread contempt faster than Helen Clark was able to achieve the same, but in both cases the result has been slower to develop than desirable.
The media/status quo have much to answer for.
Hard searching questions? But, but, but... The media and politicans really prefer spending their shared time in bed together.
I have probably gone as far as is sensible in suggesting the media is a large part of the problem, but will add that I expect new jounalists to have normal distributions for a number of characteristics. Then that I suspect selection pressures under our current cultural/political/economic environment to count against any journalist wanting to ask tough questions.
Today's reporting of Fonterra's results being a good example.
yet clearly we see different structural issues I see lack of oil and crazy specualtion, you see lack of cheap buildable land.....so only time will show us who is (mostly) right....might take 5 to 10 years to see clearly in the rear view mirror, think we'll both be around?
regards
Dr Copper, he say - 'run for dem hills!
http://af.reuters.com/article/metalsNews/idAFL5E7KM2AR20110922
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