Commodore Decker’s Planet Killer
The New York Times reports that the Euro just got a little too much bigger to fail. “The German Parliament voted overwhelmingly on Thursday for the expansion of the bailout fund for heavily indebted European countries. With that, the front now shifts to tiny Slovakia amid questions about an approval process already months long and still not complete.” The NYT says there may be little appetite in Slovakia, “an impoverished nation from the former Communist bloc whose people suffered mightily to adopt the euro and have little stomach for bailing out richer countries like Greece.” But they are likely to be strongarmed.
The speaker of Parliament in Slovakia, Richard Sulik, has said he will do whatever he can to stop the bailout fund from coming to a vote, even as advocates have desperately sought a compromise. But the combined pressure of the euro zone members will probably be more than Mr. Sulik and other opponents can bear.
Buck up Mr. Sulik; sacrifices are needed for the greater good. Even if there is nothing “good” anyone can think of, you must admit that it is at least “greater”. But the problem, according to Jeremy Warner of the Telegraph, is that none of these further commitments of resources is accomplishing anything other than roping the membership of the EU together so that they can go over the cliff as a unit.
As it stands, the single currency has become a doomsday machine, driving Europe and the rest of the world ever closer to financial collapse. Can it be switched off in time? … No one can be in any doubt about where this is all heading. … Behind these ructions lies a dogged refusal to acknowledge the root cause of the problem…
Ezra Klein at Washington Post has interviewed someone with a less pessimistic view. Carmen Reinhardt believes that a combination of postponing the debt maturities and forcing bondholders to take a haircut would solve the problem in the long run. That plus a European purchase of distressed economy pain and the recapitalization of banks from taxpayer funds will eventually do the trick. Reinhardt says:
I think the outlook is dire, but it’s not end-of-the-world dire. I don’t think it’s even end-of-the-Euro dire. I think the ultimate endgame in Europe is debt restructuring in Greece and Ireland and Portugal. And, in particular, I mean haircuts. I mean changing contracts to be less favorable to the creditor. …
If the policymakers were to be proactive, they would restructure Greek debt alongside bank recapitalization and at the same time, restructure both Portugal and Ireland as well. …
I think the most constructive thing would be for the ECB to purchase literally industrial quantities of the debt of these distressed economies and, secondly, for not just Germany but also individual governments to set aside some funding to recapitalize the banks that are holding these debts so there isn’t as much of a run.
There is in all of this the implicit supposition there exists a real pool of resources to reinforce failing institutions and that this pool of resources amounts to something more than a printing press. But if such an El Dorado does exist Reinhardt does not identify its location. The money seems to be slated to come from “government” or the ECB — that is to say from either the taxpayer or from more debt — from places we’ve looked already. A cynic might be tempted to conclude that Reinhardt’s El Dorado is as genuine as the original.
Maybe Warner is right. The European Union has turned on a Doomsday Machine and they can’t bring themselves to turn it off. The worst of it is that the more energy and money the Eurocrats feed it, the more powerful this Doomsday Machine seems to become. It is as if malinvestment, driving this destructive process, becomes more destructive the more malinvestment there is. One thing seems clear: the Euro-killer is growing, growing and growing. When conventional weapons won’t work, what is there left but the hope of a political act of courage; that some nation, some politician, will have the nerve to say the unsayable.
Nah. Kick the can down the road. Now the only question is, when things really become desperate who can the rest of the world convince to play the part of Captain Kirk and pilot the USS Constellation into the heart of the Doomsday Machine? Maybe they can convince Ben Bernanke if he can figure out a way to transport the world’s entire wealth to safety back to the Enterprise in time.
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“There used to be an economy there – BUT NOT ANYMORE!”
“I’m just waiting for someone to shoot the Archduke.”
That obnoxious French sounding laugh you hear is coming from Charles de Gaulle’s grave. Nothing worse than a French “told ya so.”
President Muffley: Well I… I would hate to have to decide.. who stays up and.. who goes down.
Doctor Strangelove: Well, that would not be necessary Mr. President. It could easily be accomplished with a computer. And a computer could be set and programmed to accept factors from youth, health, sexual fertility, intelligence, and a cross section of necessary skills. Of course it would be absolutely vital that our top government and military men be included to foster and impart the required principles of leadership and tradition. Naturally, they would breed prodigiously, eh? There would be much time, and little to do. But ah with the proper breeding techniques and a ratio of say, ten females to each male, I would guess that they could then work their way back to the present gross national product within say, twenty years.
I keep marvelling at the fact that in none of these discussions or scenarios by the powers-that-be is there any mention, nor room made for, the notion of wealth creation.
No one wants to reignite the underlying economies by liberating the wealth-creating engines. Nobody. They keep turning over Europe’s sofa cushions to find spare change. The same thing is happening in the U.S. with this whole childish “stash” mentality. Others have compared this kind of thinking to “cargo cults.”
Two continents both capable of producing greater wealth than they currently are refuse to go to work. Are they all waiting for a solid-gold asteroid to splash down or something?
Are the Germans,the French, and the Belgians going to invite Mr. Sulik to a conference to “persuade” him? Perhaps for historical reasons to Munich?
Does the phrase Mníchovská zrada ring a bell?
The question is, can Sulik resist long enough for someone, anyone, to shoot an Archduke, somewhere?
Oh, the German vote was to authorize the bailout fund. Filling it sufficiently to actually bail Greece [and Italy, Spain, Portugal] out is another matter. Guess where the money is coming from? After all, the Fed has such a nice collection of US Treasury Notes backing the printing of Trillions of dollars of currency. Why not a bunch of worthless Eurobonds so that they can print Trillions of Euros?
Subotai Bahadur
Oh, the MUSIC! GET OUT OF MY HEAD!!!
I gotta admit, the scene in Futurama that made me laugh more than any other was when they went to Zoidberg’s home planet and THIS was their National Anthem:
da-da DA DA DA, DAH! da-da, DA DA!
Germany votes to bail out the Euro–Germany now rules Europe–with the exception of the UK.
This is a journey that started in 1914–Europe has now fallen to to German hegemony by a vote and the stroke of a pen–no violence.
The next conquest by Germany will be Russia –first alliance–followed by takeover–again-this time without violence.
These will leave the UK in its traditional role as key ally of the USA.
The German domination of continental Europe has been a long bloody journey
-now it is done deal–the Fourth Reich achieved by finance.
the Fourth Reich achieved by finance. — or do you mean bankruptcy? There is a difference, though I wonder if the Eurocrats know it.
Wretchard:
Not to be more pessimistic than I usually am, but you do seem to be saying nothing is going to stop this from being a massive disaster. I agree. The problem with socialism, as Margaret Thatcher pointed out, is that sooner or later you run out of other people’s money. That time is coming, soon. The right policy would be to abandon the PIIGS countries, kick them out of the Euro zone, and let them face the consequences of their actions. Painful, undoubtably, but the damage would be limited and containable. Many of the big French and German banks, some US ones as well, would suffer from holding government bonds that cannot or will not be redeemed – so be it. Better to let that happen than let them drag the rest of the European and US economies down.
However, the political leadership on both sides of the Atlantic won’t do it. They will instead insist on higher taxes, more borrowing, more spending, and when those fail to achieve the hoped for results the cry will be for more of the same, and more and yet more… until the results are so disasterous we start talking about the great depression of 2013. Of course, by that time Obama will be safely re-elected and will not care.
There is a reason to kick the can down the road. The fact is that if the global economy surges solidly for long enough, then the Euro and the world is saved and the bailouts are easily worth it. That’s not implausible either, since after deep recessions bounce-backs are fairly common.
The other option is guaranteed catastrophic failure. No choice but to go forward in my opinion.
Oh Victor, think about it. Suppose you’re right (and I don’t, but just for the sake of argument) and Germany *does* rule Europe now. (In fact, I’m sure Marie Claude will object to that characterization quite a bit) What do they “rule”? Gaining territory is only worthwhile if it is productive and profitable – but it looks to me like Germany’s new “empire” consists of a couple hundred million bankrupt deadbeats who don’t have the slightest intentions of actually doing any work to pay for all of this. They sure do want the money and the food to keep on flowing, though! There gonna get real ugly if it doesn’t. And does Germany have the personell to go in and crack the whip on the rest of the continent, make them all shape up? Maybe 70 years ago they did, but not now. They don’t even have the nerve left to try anything like that.
There’s a reason companies, nations, and even entire societies go bankrupt. It happens when it’s no longer worth the effort for anyone to keep them on life support anymore.
If Europe isn’t already at the point where it’s cheaper and easier to let it collapse than it is to keep propping it up, it soon will be. You say Germany rules Europe? I say Germany “rules” a rotting, stinking corpse. Congratulations Germany, you won the booby prize.
Bret wrote: “The fact is that if the global economy surges solidly for long enough, then the Euro and the world is saved and the bailouts are easily worth it. That’s not implausible either, since after deep recessions bounce-backs are fairly common.”
VERY glad you said that – because that is 1) exactly what all the Lords of Finance and Government are telling themselves right now, and 2) is absolutely, completely, and totally wrong.
HERE is why that idea is not just “Implausible” but IMPOSSIBLE. Until this crisis is reasolved – THE GLOBAL ECONOMY WILL NEVER “SURGE”. The world economy has a cancer, and it is going to wither and shrink bit by bit until the cancer is treated. Oh, and the treatment will be harsh.
This is NOT an ordinary “recession” – it is NOT going away on it’s own. “Kicking the Can” means that the cancer grows, and grows, and grows, and serves only to make the final collapse all the worse.
You are correct about guaranteed catastrophic failure – but the size of that catastrophe grows every day we put off the reckoning.
@11: “You say Germany rules Europe? I say Germany “rules” a rotting, stinking corpse. Congratulations Germany, you won the booby prize”
Well, the Germans do have a long tradition of allying themselves with the wrong sort:
WWI: The Ottoman Empire
WWII: Italy
Today: The Eurozone (including the cheese-eating surrender monkeys!)
What WWS said
On equibble about the post….
The Planet Killer was automated, it needed no human guidance in order to operate – the Euro and the debt crisis is of a human function. A better analogy would be ” A Taste of Armageddon” where a given planet is engaged in a simulated war with its neighbor for reasons forgotten…. the planet’s leaders may act on auto pilot but they prove capable int he end (with a little help from Kirk) of ending the war when faced with the catastrophic alternative of a real war
That’s the issue here, the simulated planetary war of the Euro and the European Union marches ahead laying waste to all in its path, a mad monster best called perhaps “Jean Monnet’s Dream” It’s much like the planet killer but it can be controlled by humans if they wish to.
The problem is the people don’t wish to, the mad automated monster of the European dream must go forward at all costs. At each part of the road those who hesistate are threatned – usually not by people or states but more by circumstance. The magic of getting TARP passed was the sense of urgency forced upon members of Congress, the sky is falling and you need to do this now or else! In method and result it’s much like tactics used by some of my less ethical colleagues when I sold floor tile – you always have to be seeling and the best ways to do that is 1) create a sense of urgency 2) have the urgency come from some circumstance outside of your control (I would love to get the deal for you – but you know corporate …) In this case the end of a European-wide Euro will mean the end of the Euro for all, the European project will crumble and then what?
The problem comes down to people and culture. We could yoke germany to the harness of monetary/political union to milk it for all it’s worse and we can let Greece and the 4 other PIGS off the fiscal hook with haircuts and Euro buys but until all the members of the Euro can live within their means then all this action, sound and fury, will mean nothing because we will simply move to the next act of fiscal insanity but with the monster even more out of control.
The Euro cannot survive as it is. I think everyone understands that which is one side calls for greater political integration and new instituions while others call for its dismantlement. This point was inevitable from the momement it was decided to include countries like Italy and Greece in the Eurozone, it is now time for the decisive turn – one way or the other
Today it was announced that Germany’s unemployment has reached the lowest point in 20 years. Sixty percent of Germany’s exports go to other EU countries, and Germany’s strong point is machinery, not designer handbags. I don’t know who produces the ATMs etc for all the mediterranean tourist areas, but I’m pretty sure it isn’t Greece. And I would guess that German banks finance their purchase. Germany cannot afford to let its customers go under. Right now, Germany’s energy policies (which they do their best to export) are a big problem for business. Little of this is sinking through to the average German.
As a thought experiment–bankruptcy is a financial strategy and can be a strategy that leaves the last man standing–Germany–with all the cards.
Germany sees its empire as being in the East–always has
–the energy, strategic mineral and food resource wealth of Russia are huge
–under the right management
–which Germany has always believed it can provide.
China disagrees–but that is for another day.
Turkey and Japan may revive their old romance with the Reich vision.
The US may well see it as a better alternative to the Chinese Empire
The Fourth Reich achieved by finance/ bankruptcy
—better than achieving it by genocide.
Buried bones may shiver–but the arc of history is long.
“The money seems to be slated to come from “government”….”
There is a lot of that going around.
Mayor of Tampa, FL, regarding the new high speed rail system: “I am hoping the government will pay the entire cost so the taxpayers won’t have to.”
The people of Czechoslovakia had a saying after the Warsaw Pact broke up, “The communists turned an aquarium into fish soup. Now we have to figure out how to turn fish soup back into an aquarium.”
In other words, the Slovaks know a scam when they see it.
This kind of stuff is why I think that Romney would be a good President – in 1992 – but today, we need someone more radical than he is capable of becoming. We need someone who is not concerned about his political future. That may be Perry or Palin but I am sure that Herman Cain fits the bill. He’s even got the right name. He can blow up the current system and retire to be cursed forever by the unions and people who want to retire on SS disability at age 23 due to ADHD. And if they don’t like it we can always do a Morgan Freeman and call then all Racists.
Yay! Another tortured “Star Trek” analogy: “Amok Time”, with The Yurps as Spock; crazed by his heredity, unable to control himself, his once-mighty logic stripped away by his basest desires, smashing his best friend who only wants to help him.
Anybody want to try “Trouble with Tribbles” now? Teh Bernnank as Harry Mudd?
“… is that none of these further commitments of resources is accomplishing anything other than roping the membership of the EU together so that they can go over the cliff as a unit.”
Wouldn’t be the first time. That’s precisely what the diplomats did trying to stave off what became WWI. It came anyway and was all the worse for it.
The roped climbers analogy keeps popping up regarding the EU.
When moving over rock, ice and snow at high altitude and roped together, each team member has an obligation to the others not to fall. The contract is for each member to look after themselves and to not put the team in jeopardy. The rope is a statement of confidence that each individual is perfectly capable of making it on his own. In extremity, the team will attempt to save a fallen member even though it is likely that the whole outfit will be dragged into perdition. Two things make this acceptable to the team. One is that everyone’s abilities should be equal to the terrain – no weak links. Another is that, in extremity, each member is committed to the Three Musketeers thing – one for all and all for one.
When this analogy is applied to the situation that the EU is now in , the EU doesn’t meet the requirements. First, it is questionable that any team member is equal to the terrain. The EU is hanging together only because the members can’t make it on their own. So every EU country is now over-matched by terrain that they foolishly ventured into. They mistakenly thought that a magic rope – the Euro – would somehow give team members capabilities that they never had. Second, some members behave as if they have no responsibility to team safety. For them, the Three Musketeers thing is a laughable notion. The EU never was an example of the total being greater than the sum of the parts. It’s a case of the team being only as strong as its weakest link. The EU is a team with too many weak links that has strayed into terrain way beyond its abilities.
That kind of team soon loses traction and says hello to gravity.
SB/5—
”Does the phrase Mníchovská zrada ring a bell?”
No; what is it?
As it stands, the single currency has become a doomsday machine.
No, the single currency is innocent of who spends it for what.
It may, after all, be the mechanism by which Germany saves Greece. What could be more wonderful?
Anyway, DECKER @1 nailed it already: “There used to be an economy there – BUT NOT ANYMORE!”
They can mint coins in solid unobtainium, putting as many nationalist heroes and symbols on front and back as they might like, and it won’t stabilize an entire continent that does nothing but consume Chinese goods and retire on a fat pension from even pretending to work at age 50.
“The next conquest by Germany will be Russia –first alliance–followed by takeover–again-this time without violence.” Agree with wws. And it’s more likely to be rich Russians buying more real estate in Bavaria than the other way around. I don’t see a lot of rich Germans buying up all the black earth of southern Russia and Ukraine Hitler wanted to feed the Reich after he’d fertilized the soil with Russian blood. I think it was Soros who was trying that land grab tactic instead.
Gordon @ 22 — I think he’s referring to the Reichsprotectorate of Bohemia, the most productive non-German part of the Nazi war machine which included Czechoslovakia.
Romney’s just another establishment RINO, Perry is back to stealing Ron Paul’s anti-Fed thunder and Cain is probably the Establishment’s back up plan in case GOP voters opt against Mr. Romneycare and Perry too. God forbid Ron Paul ever get anywhere near the nomination, how will we fund the military industrial complex/e-printing press then?
Yes, WC, the hallowed ZIPPER FALL.
—–
http://boombustblog.com/BoomBustBlog/Sophisticated-Igorance-Or-Just-A-Very-Very-Short-Term-Memory-Foolish-Talk-of-German-Bailouts-Once-Again.html
Since Reggie’s done it: read it.
Scaling up bad economics = vortex of disaster.
We’ve got to kick Central Planning.
Toto I can see Kansas… I am still having a hard time figuring out why the Market hasn’t plunged, we should be in the 6′s maybe lower but it’s like as soon as the nose dive starts someone or thing turns on a spigot and the funds follow… So when the illusion is done we will find out that the end came and gone and we we’re all just dreaming.
Give me the original Doomsday Machine! The original, un-remastered, paper mache
cone that gave me nightmares as a kid!
http://www.youtube.com/watch?v=aHGW-qplAQE&feature=related
Masters of the Universe:
At a meeting last week between the world’s most powerful bankers and Bank of Canada Governor Mark Carney, Dimon tried to tell the central banker that banks were suffering under the weight of all the new bank rules. But his aggression drove a red-faced and visibly angry Carney out of the room, according to people familiar with the encounter.
Dimon referred to new global bank liquidity rules as “cockamamie nonsense,”…
[...]
Major banks have lashed out at the slew of new rules being implemented in response to the financial crisis. They contend higher capital standards and other new regulations will impede their ability to lend and hurt the already-fragile economy, although their arguments appear to be falling on deaf ears with regulators.
[...]
Carney, who spent more than decade at Goldman Sachs before becoming Canada’s central banker, was calm at first…
[...]
The outspoken Dimon has already blasted the new international bank rules as anti-American and went a step further at the meeting.
“I have called it anti-American. The only reason I am calling it anti-American is because I am American. I also think it’s anti-European,” the attendee recalled him saying.
In the end, an agitated Carney left in the middle of Dimon’s tirade. Other chief executives such as Goldman Sachs’ Lloyd Blankfein and Deutsche Bank’s Josef Ackermann looked stunned, the sources said.
Dunning the Slovaks for this foolishness is at bottom, sad. It all started out with good intentions; as much as I hate the system it was at least established with the hope of solving real problems. The 60′s generation took over, with little but arrogance to contribute. Now people are going to get hurt.
The answer to the declining EUR and Europe is of course more Europe. Just like the answer to Russia socio-economic woes is of course more Putin.
Mr. X
I was presenting a thought experiment.
However –the rich Russians will side with Germany, Putin is ruler for life-in his dreams
Russia is collapsing demographically and educationally, the flood of heroin from Afghanistan is decimating the Russian youth through AIDS and addiction.
Siberia has vast resources of oil, gas, gold, platinum and other strategic minerals–either Germany or China will exploit them.
Russia will capitulate to German rather than Chinese hegemony.
This time the German take-over will be by engineers and bankers–not by Nazis.
As we withdraw our US military from Germany and Europe then Germany will build its military–but not to excess–they will build nuclear weapons–as will Japan and Turkey.
But the 4th Reich will be achieved through finance and engineering and not through any crazy ” chosen people” genocide.
Germans seem to see themselves as the bankers these days and no longer as the “chosen people” racist fascists.
Others have now taken on that fatal cloak
http://www.zerohedge.com/contributed/toxic-titles-herkimer-county-clerk-nationwide-title-clearing-“mers-assignments-and-satis
Idaho Spudboy
en attendant, the cheeze-eating surrender-monkeys win their wars, t’em ! unlike the mighty big boyz !
Victor@33: Russia will capitulate to German rather than Chinese hegemony.
I recall being surprised that the new Russian state did not explode into a frenzy of modernizing capitalism. My understanding is that I was not the only one who was surprised (LTCM). Timing – and events – are everything. The Russian people were not prepared to execute under the capitalist model – while the “oligarchs” and the Mafia were – if their participation can be described as capitalist with a straight face. Neither the timing nor the circumstances were propitious for the emergence of a Middle Class. Which is neither here nor there, but it reminds me of the unique set of circumstances that permitted USA to develop and evolve over a 200-yr history. And geography counts. It is not easy to get where we are, being the short story.
This time the German take-over will be by engineers and bankers–not by Nazis.
Very true.
11. wws
Effectivelly Germany rules the EU, without tanks, everything that is decided in Brussels is with the german support, or nothing is decided ! Lasst year, at the beginning of the euro crisis the Germans were incredibly arrogant and insultant for the Mediterranean club, they believed they could force the southern countries to repay their debt loans at the austerity altar, they didn’t imagine that that was the cause that they couln’t repay anything, because of the recession that that was implying. (I must say that that was the same regime that the Germans imposed on the occupied countries in 1940, when money, food, labor forces converged toward Germany). Today I find the german discourse a bit more reasonable, we don’t read trash on mediterranean countries anymore (or I missed the articles), and or that the failed southern countries must be punished, except some silly ignorant german commenters on blogs would still flame them, and or France, cuz they accuse us of having forced them into the euro, and that ECB worked essentially for the French ! Anyways, one would know, cuz the late attacks were against the french banks, that didn’t particularly benefitted of the ECB benevolence ! Though there have been articles, that explained how the Germans were making a beggar thou neibour policy, that intra EZ trades allowed them to get their surpluses, and if they’d returned to DM, this EZ significant part of trading would be doomed, and above all the Germans learnt that their banks were more wetted than their elite ever avowed it ! Now step by step, they understood that if they don’t make a effort, their whole economy based on exportations would cramble. So today they are reconsidering Greece as a patient, that must be trained in economy and transparency. Dunno if it will work, Greeks are Greeks since such a long time, hiding their revenue was part of the surviving behaviour when they were under Ottoman regime, and this behaviour persisted with their elite rules.
Otherwise, I don’t believe that the Germans have the stomach to subjugate and or to manipulate the Russians again, Putin ain’t that sort of naive person, but certainly they’ll have favorite trade exchanges, and Putin would rather be the kind of person to manipulate the Germans. I don’t know if the euro is “moribond” at the moment, anyway the german vote allowed another delay. We’ll see who the markets are going to point on soon ! Sure it was much easier before that common money and before the Lisbone treaty, we didn’t have to wait for a german “green light” for everything we decided.
Though if the Germans feel more empathy with Russia than with the US, I don’t think that France will ever follow them onto their eastwards path.
Those that are irritated today, it’s the Brits, cuz the Germans (and the French Sarko) want to implement a Tobin taxe in EZ, so London city will suffer, as trading corporations will move to Hong Kong and or to Singapore. I’m not going to cry for the Londoners, they were those that bet on our banks and debts bankrupty ! So they’ll have to plant potatoes, that’ll make a change !
Yeah, you’re wrong here. The flaw in your argument is that there is a reason that economies surge after deep recessions, but first, why do economies go into recessions? Because of mal investment. In boom times, people get a little to trigger happy with investments, and a ton of money is poured into things that just don’t work out. Then one day, the ecnomony wakes up to realize a huge part of it’s productivity is tied up supporting failed projects, and there’s not enough surplus to fuel growth any longer.
That’s the start of the recession. The recession lasts until enough of the mal investments have been liquidated and had whatever could be salvaged from them repurposed. Liquidating the mal investments frees up surplus productivity to be invested in new ideas again, and the economy “surges” as a result.
What the EU is doing with the bailout (and what Obama et al have been doing with the stimulus etc.) is attempting to prevent liquidation of the mal investments. Natch – the EU itself is one of the bad ideas that’s sucking up large amounts of productivity. By delaying the liquidation, they are delaying the recovery.
Kicking the can down the road in the hopes an economic boom will come along and rescue the economy is utter idiocy. No recovery can happen until the can is picked up and dealt with. It’s like pounding another shot of vodka in the hopes you can stay drunk until you get sober enough to drive home.
#22 Gordon and #25 Mr. X
Sorry, went a little too far out in references. Mníchovská zrada is the Slovak phrase for what happened at Munich in 1938 when the great powers dismembered then-Czechoslovakia for the benefit of the Dritte Reich. It means, roughly, “Munich Betrayal”. Somehow it seems fitting that the second iteration will be for the benefit of the Vierte Reich.
Subotai Bahadur
JMH…
It’s more accurate — and a lot more rude — to say that mal investment is a euphemism for promoting/ believing the wrong capitalists.
That is, the problem with Solyndra was not their robots — it was entirely the management.
The business cycle is, in fact, necessary to FIRE incompetents.
Which see, November 2012.
The TRUE problem with the World is that the incompetents — using anti-knowledge — are still in charge of the system.
Which see, B. Frank and N. Pelosi.
Russia’s post Revolutionary headache was due to anti-self-help programming. It had become totally absorbed by the law abiding.
Thusly, the only players with any moxie were all criminals. None of the oligarchs would not score extremely high on any psychiatric metric for psychopathy — as do our current crop of Banksters.
We have, globally, a pandemic of crony theft and embezzled statistics.
ALL of our national metrics are now as twisted as Greece.
—–
The corruption that flows via Chicago on the Potomac will require resetting the EPA on a new cleansing mission: clean up its act.
In future years the Green Jobs will be the source of many a wicked pun. Going for the Green, indeed.
@11: I say Germany “rules” a rotting, stinking corpse.
In late WWI (1917, I think) the Germans said of the Austro-Hungarians that Germany was”shackled to a corpse.” You’d think the Germans would learn.
If you think a super-company/bank can take over Russia then “you haven’t been paying attention” to the wonderful Russian BP’s (beyond petroleum/as opposed to British Petroleum) adventure.
You also “you haven’t been paying attention” to the trivia fact that when Russia cuts natural gas supplies to Europe, people in France die of cold. But then again it is just (very early) October.
China didn’t bailout Europe because of …… (insert country of your choice as long it is Russia).
Adi
“when Russia cuts natural gas supplies to Europe, people in France die of cold. ”
may be you ignore that our energy is provided at 83% by our civil nuclear plants, that our exposition to russian gas is limited to a much smaller percentage than the Germans, also that Sahara gas is our main source, and besides of that that we co-share with Belgian a huge gas tank which is supplied on free markets… so when Putin caugh, it doesn’t disturb us !
and, a funny russian sense of humor
http://www.youtube.com/watch?v=A7RD5ONjv8M&feature=channel_video_title
Does China want to see Russian gas flow to Europe? The pipeline runs through Slovakia. What could happen?
44
WHAT?
The pipeline that counts is the one projected to cross UNDER the Baltic.
Slovakia?
To my knowledge virtually NONE of the major trunks run that way.
They’re prone to run via Ukraine./ Poland.
Either way Putin is not happy.
But it’s fracking that has Putin upset.
With it Paris and Warsaw and Berlin and London don’t need imports at all.
It’s simply tragic.
Before the Star Treck Doomsday Machine there was Fred Saberhagen’s “Berserker” stories
http://en.wikipedia.org/wiki/Berserker_(Saberhagen)
They were Von Neuman machines that made a lot of different models and on top of that they learned the value of “good life,” Life that would sell their souls to help the machines destroy “bad life.”
To me the central planners, the leftist, etc. have created life destroying mechanisms and let them loose over the face of the earth. We may need nuclear weapons in the end to stop them.
#37. Marie Claude.
‘I’m not going to cry for the Londoners, they were those that bet on our banks and debts bankrupty ! So they’ll have to plant potatoes, that’ll make a change !’
We remember 16 September 1992 and being thrown out of the ERM by Germany, because we weren’t good enough.
Thank you, oh Thank you! Revenge is a dish best served cold, I believe.
If Germans see themselves as engineers and bankers then they are likely to finally see what it’s like to be jews, and blamed for selfishly exploiting others through the bourge-wah capitalist system. It might all be peace and safety in Germany, but that can sometimes make others very jealous, and green with envy and resentment. Greece has beeen exploiting them right back through soft means, and soft power, but they might just instead up the ante and threaten to get real mad if the euro nations, like Germany doesn’t or won’t “play along”.
38.JMH, 40.blert
One can model an economic system as a thermodynamic system. In which case wealth is a measure of a society’s creative free energy.
One can restate the second law of thermodynamics as “it takes energy to create order and it takes energy to maintain order”.
Creative individuals (the producers) can use the creative free energy of a society to create new order, that is, to increase wealth. Parasitic individuals will just feed on a society’s creative free energy until they exhaust it.
From a memes point of view, it is the parasitic memes that are in ascendancy in the western world today. And unfortunately, as in nature, often the only way to kill a parasite is to kill the host.
It’s not the parasites, it’s the catalysts that created a series of artificial equilibria – a matched set of perfect storms – the tyranny of enzymes. We’re all going to die.
Blert, JMH, others, I think what you are sayin is that the Crony Socialist/Capitalist governments around the world have tried to smother and dampen the free market’s “clearing” function that a recession provides to protect their crony clients.
The”clearing” function clears the market of the deadwood mal-investments. Small periodic recessions and other market punishments for mal-investments keep the marketplace and an economy efficient and prosperous. These massive bailouts and manipulations to protect the TBTF and other protected cronies have just piled up the deadwood and the deadbeats to such an unimaginable height that the next market clearing, when it comes, will seem like a killer plague on the land.
48. Gaffe Prices
it’s not so simple
“the previous post I sketched out the origins of the eurozone crisis, and argued that powerful systemic forces, not irresponsible behavior, pushed the periphery countries toward crisis – and may well have done so no matter what the peripheral eurozone countries had done. The common currency encouraged (in fact, was designed to encourage) large-scale capital flows from the eurozone (EZ) core to periphery. We know from experience that such “capital flow bonanzas” are susceptible to sudden changes in investor sentiment, and very often come to a sudden stop. The sudden stop in this case happened in 2009″
http://streetlightblog.blogspot.com/ (part 2) Tuesday, September 27, 2011
(part 1) Thursday, September 22, 2011
5050noline
Hmmm It’s rather that your country chose to not stay in ERM anymore, after Soros’ attacks on bank of England, I believe. BTW, it’s your lady Gaga that sold out your enterprises to globalisation for the sake of the City banksters, today you’re paying a expensive price too. If your city loses its financial leadership, there’s no source of money left for UK, alone, I don’t know how you’ll be able to manage growth !
Things are going as unexpectedly – unexpected. For the average Joe who doesn’t trade in currency derivatives or swaps I recommend selling to market rallies that come at the end of the trading day and get into gold and cash.
There seems to be a pattern for each up day. The end of the trading session seems to be when the most cash is injected by “unknown” sources (so, if the trading day is net down but suddenly turn up – then sell into it).
Keep your powder dry. It is going to be long 13+ months until 0bama and his Zero interest rate policies are gone. As usually this assumes the he is actually gone by the next election – which only time will tell.
51. Unsk You have described perfectly the reason for controlled burns in our forests. If the dead wood is not periodically cleared off of the forest floor by fire, then when a fire does happen, its impact becomes devastating.
I am a simple man, but not simple minded. The overall problem I see is people everywhere have stopped building/producing goods and started producing paper. Over-regulation, over-lawyering, over-governing, over-banking. This is unsustainable and bears out Mrs.Thatcher’s famous quote about running out of other people’s money. The only way to fix this, and it will happen either voluntarily on involuntarily, is to reduce governmental involvement in daily affairs and fire the minions that administer it. And NO FEDERAL RESERVE SCHEMES! No more EBT, if you need help see your local food bank or kitchen. When each state is SOLELY responsible for meeting the needs of their state citizens, they are more accountable.
Bottom line, produce products, not paperwork. That is the true wealth of a nation. We, as a nation, understood this once, before progressives began the big push. Let’s push them back.
The”clearing” function clears the market of the deadwood mal-investments. Small periodic recessions and other market punishments for mal-investments keep the marketplace and an economy efficient and prosperous. These massive bailouts and manipulations to protect the TBTF and other protected cronies have just piled up the deadwood and the deadbeats to such an unimaginable height that the next market clearing, when it comes, will seem like a killer plague on the land.
This has a remarkable resemblance to the prevailing environmental policies where the leftist powers-that-be try to “manage” Nature, with the same catastrophic results, such as spectacular forest fires because of too much dead, unexploited wood, water diversion to save tiny fish, carbon-credit scams, shutting down power plants with no viable substitutes ready to move in, etc.
No surprise, of course: it is all about creating more and more power to meddle more and more, and to get paid more and more to do so, while completely ignoring the need to allow the continued creation of wealth to pay for all this. I see that others have noted the startling (to BC’ers and other sane people) absence of policy prescriptions for reviving economies through freeing up the marketplace. The original cargo cults could be perpetuated because the South Sea islanders didn’t have much to begin with, but when wealthy nations practice something similar on a grand scale, people used to prosperity are left devastated.
56. SpeakEasy
Bottom line, produce products, not paperwork. That is the true wealth of a nation. We, as a nation, understood this once, before progressives began the big push. Let’s push them back.
“4. Friedrich Hayek’s Ghost” makes the same point, and so do I. It’s very disturbing how the western world’s leaders adamantly refuse to even confront this issue.
One thing that seems to be forgotten in all the dire talk is that the rich countries, although hugely indebted, are also holders of debt to others. The answer for the USA, and possibly some others is so simple. They print money and bail out the poorer countries in a ‘debt swap.’ The bailed out countries owe nothing to the USA, but take on the USA’s Chinese debt.
Now the poor countries owe China who will deal with their economies in a fashion for which the USA has lost its apetite and the USA has relieved itself of its debt burden.
VOILA!
ChrisVJ…
America does not hold any Chinese debt.
The Yuan does not circulate outside of Red China — except on special sovereign trade deals — like to Russia.
These deals are, in fact, barters — since neither party wants the others fiat — nor can they suffer the other’s court system.
This is the commercial reality which has caused the ENTIRE globe to node around the US Dollar. It’s not like any other currency whatsoever.
As for paper gambits — the Banksters are all over it. No scheme can make an embezzlement un-happen.
Greece STOLE massive wealth from Germany, France, Austria and the Netherlands. Period.
It was sovereign embezzlement. Once you understand the unspeakable truth everything logically follows.
Embezzlers NEVER pay back their thefts. The money was blown to the winds. ( Think Hellenic Railroad and Hellenic Airways )
The Greeks spent their once in many generations windfall on a party — especially for the elites.
http://www.zerohedge.com/news/david-stockman-blame-fed
blert@34
Notwithstanding that everybody everywhere knows to the penny who owes what to whom and why.
In this case, it is that every document wasn’t duplicated in royal purple ink on Northern Quilted bathroom tissue posted via Chinese pony express every two weeks.
Blert,
An inexactitude of terms that the layperson will understand but the expert will decry, sorry. Of course what the USA “owes’ the Chinese is the redemption of bonds at some future date, but for the layman that is USA debt, the Chinese being the creditors. The problem with experts, of course, is that they are so much part of the system they can not see anything outside of it.
The ‘embezelment’ would of course be passing off Greece’s ability to pay as being as valuable as that of the USA, however given a suitable discount and the difference between what the USA is prepared to do and what the Chinese would be prepared to do to obtain repayment it is conceivable that they would find it amenable. (A kind of fiscal rendition.)
Inflation by printing money might be called embezelment too but somehow when it is done by government it is legal and almost acceptable. That is the other half of the equation.
I am not suggesting it is moral or desirable but the irony of the USA bailing out the Euros with money it has to ‘borrow’ from China is inescapable