World Economy Analogy

Last night I watched a short documentary on the potential fall of the dollar.
I thought it was quite good.

"Imagine four travellers are stranded on a desert island. One is from a western country, the rest from elsewhere in the world.
To be efficient they decide to divide up the jobs. One person is given the task of fishing, one person farming and one person building. The western person is given the task of eating and consuming.
Every night the first three people, having worked hard all day, would use the output from their days work to create an amazing feast. The western person would, as was his job, consume this, leaving a few leftovers for the rest of them to eat.

In the modern economic system, this is seen as good as the consumption of the food creates work for the rest of the group the next day."

Would they all have a higher standard of living, as a group if the work was shared?

BBC NEWS | Science/Nature | Cities dim lights for environment

BBC NEWS | Science/Nature | Cities dim lights for environment: "Sydney was the first major city to begin 'Earth Hour', when at 2000 (0900 GMT), lights went out on landmarks like the Opera House and Harbour Bridge.

Bangkok, Toronto, Chicago and Dublin are among 27 other cities officially due to follow suit at 2000 local time."

This was due to take place yesterday. Is good to build public awareness, however many of these countries are also the biggest polluters in terms of green house gases per person.

Documentary Observations

Last night I watched "Protocols of Zion". It analyzed the information and misinformation around this and in the public consciousness, rather than the actual book itself.
It was disturbing the amount of hate and lack of understanding that there is around. People believing what they want to believe and agenda's being driven because of this.
Was a good film, but worrying.


(also look at this film too from Louis Theroux, similar types of dynamics)

Slump Moves From Wall St. to Main St. - New York Times

Interesting article from the NY times.
In all of this discussion, although there is plenty of discussion around economics and fundamentals; it is the general mass population and their behaviour that is most important and acts as a magnifier of any effect. If they are happy and unconcerned, it all continues and the economy can slowly be let down. If they panic, all bets are off.


Slump Moves From Wall St. to Main St. - New York Times: "For the country as a whole, recent data shows that the economy is deteriorating at an accelerating rate. From September to January, average home prices fell 6 percent compared with a year earlier. Consumer confidence has been plummeting. The private sector shed 26,000 jobs in January and 101,000 in February, while those out of work have stayed jobless longer, according to the Labor Department.

Now, the broader discomfort is filtering into cities and towns that only recently seemed beyond reach."

Nice Things II

I have been looking at the stats from this blog, and the really nice thing is that the top read story is, "Nice things to say to someone". It is pleasing that a positive story gets top rating. Good news.

BBC NEWS | Business | JPMorgan to acquire Bear Stearns

Following the news on Friday, the top 3 or four here must be of concern.
We will watch this week.

Subprime Losses, source BBC
Citigroup: $18bn

Merrill Lynch: $14.1bn

UBS: $13.5bn

Morgan Stanley $9.4bn

HSBC: $3.4bn

Bear Stearns: $3.2bn - Fold, into JP Morgan

Deutsche Bank: $3.2bn

Bank of America: $3bn

Barclays: $2.6bn

Royal Bank of Scotland: $2.6bn

Freddie Mac: $2bn

JP Morgan Chase: $3.2bn - Buy, Bear Stearns

Credit Suisse: $1bn

Wachovia: $1.1bn

IKB: $2.6bn

Paribas: $197m

BBC NEWS | Business | JPMorgan to acquire Bear Stearns: "JPMorgan Chase has said it is to buy Wall Street's fifth-largest investment bank Bear Stearns for $2 a share."

BBC NEWS | Business | Bear Stearns gets emergency funds: "US bank Bear Stearns has got emergency funding, in a move that raises fears that one of Wall Street's biggest names is on the verge of collapsing."

Feds interest rate cuts are worse than useless - Telegraph

Interesting article from the Telegraph in the UK. We will see what happens monday.
Panic is the concern now.

Fed's interest rate cuts are worse than useless - Telegraph: "History will show that Ben Bernanke has failed to steer the US economy away from recession. And I won’t win many friends for saying this, but the Fed chairman and his acolytes have actually made America’s predicament much worse."

I think this is an important thread.

If you review the article again, this is actually setup by the local government to help these people out. The concern is more that this is quickly becoming permanent. Is this the tip of the iceberg?

- Have these people borrowed too much money? Yes probably
- Did they want to buy to live the life shown on TV and in the movies? Yes probably
- Should they have read the fine print on the loan? Yes probably
- Were they heavily sold the loan without have the consequences explained? Yes probably
- Did the salesperson and local bank make money from this? Yes
- Did it sell the debt on through the markets? Yes
- Does this debt need to be repaid? Yes
- Will this cause banks to default? Yes
- Should the Fed let the banks default? Yes
- But, did the Fed bail them out? Yes
- Will they get the money for the bail out by borrowing yet more money? Yes
- Will this debt need to be repaid? Yes (eventually)

Who will ultimately pay? The American people (and globally) in the form of taxes, changes in jobs, standard of living and social unrest.

This is a personal tragedy for those involved and the system is circular.
The bigger question is deciding the type of society we want to live in, its values and system.

It all links together and is important we make decisions looking at the bigger picture.
It is a bad situation that is really difficult to manage, there is no quick fix.

It is all quite worrying at the moment.

BBC NEWS | Americas | Tent city highlights US homes crisis

BBC NEWS | Americas | Tent city highlights US homes crisis: "The meltdown in the US mortgage market has led to record foreclosures and forced thousands from their homes. In few places is it worse than southern California, where the BBC's Rajesh Mirchandani reports on an extreme consequence of the downturn, but one that some observers fear could grow."

Wall Street fears for next Great Depression - Business News, Business - Independent.co.uk

So if Bear Sterns is being bailed out, where is the money coming from?

There is money being pumped into the markets this is very concerning. This is building up yet more problems in the future. At some point we are delaying the inevitable. There will be a correction, and we will see defaults on loans.

Wall Street fears for next Great Depression - Business News, Business - Independent.co.uk: "Wall Street is bracing itself for another week of roller-coaster trading after more than $300bn (£150m) was wiped off the US equity markets on Friday following the emergency funding package put together by the Federal Reserve and JPMorgan Chase to rescue Bear Stearns.

One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed's emergency funding procedure was first used in the Depression and has rarely been used since."

Avalanche Photographed on Mars

Looking at these pictures I just had to add this one. Is very exciting.

SPACE.com -- Avalanche Photographed on Mars: "A NASA spacecraft has taken the first-ever image of an avalanche in action near Mars' north pole."

Yes winter is still here

Central Canada blanketed as 'mammoth' storm sweeps eastward: "People in Central and Eastern Canada were forced to cope with yet another winter wallop on Saturday, as the storm caused hundreds of flight delays and cancellations across the regions."

Buffett waiting for shares to get "very cheap" - Telegraph

Buffet thinks we are in a recession and there is further to fall.
Would say I agree, but what is cheap. What would the Dow Jones be at to signal this...... sub 10,000?

Buffett waiting for shares to get "very cheap" - Telegraph: "The billionaire investor, who last week published his annual letter to Berkshire shareholders, said shares are not currently cheap and he's waiting for them to become 'very cheap'."

Ice Hockey Scores

Saudi Arabia advises its citizens in Lebanon

This story seemed tucked away in the news. Why would Saudi Arabia communicate this?

World | Africa - Reuters.com: "Saudi Arabia has advised its citizens in Lebanon, especially families living there, to leave immediately due to the security situation, a Lebanese government source said on Saturday."

Climate change: Has it already gone too far?

I was reading this interesting article from the Guardian. I have heard of James Lovelock before and his promotion of nuclear power, which I kind of agreed with.
This is obviously promoting his latest book, however is interesting. POint is it is already too late, we need to realise this and work out how to deal with it. Depressing thought for a Saturday evening, nevertheless maybe not too far off. Food for thought.

'Enjoy life while you can' | From the Guardian | The Guardian: "The Revenge of Gaia, predicts that by 2020 extreme weather will be the norm, causing global devastation; that by 2040 much of Europe will be Saharan; and parts of London will be underwater."

The case of the disappearing teaspoons: longitudinal cohort study of the displacement of teaspoons in an Australian research institute -- Lim et al. 3

Great article, that looks at this like a scientific problem..... where do all those teaspoons go. I love the idea of a halflife for teaspoons.

"The case of the disappearing teaspoons: longitudinal cohort study of the displacement of teaspoons in an Australian research institute"
The case of the disappearing teaspoons: longitudinal cohort study of the displacement of teaspoons in an Australian research institute -- Lim et al. 331 (7531): 1498 -- BMJ:

More Americans using credit cards to stay afloat - USATODAY.com

This article from USA today, this is the next crisis following the subprime crisis. People have borrowed too much, and this is unsustainable.

More Americans using credit cards to stay afloat - USATODAY.com: "More Americans using credit cards to stay afloat"