Aug 15, 2007

The Housing Bubble Deflates

Well, first there was a slow leak in the tire and you kept filling it up every day, but when you walk out in the morning the front tire is flat. Luckily you have a can of that rapid fix-er-up aerosol, and you inflate the tire enough to get around to the gas station, then drive it down to your car mechanic, and lo and behold, there is a nail in the tire. So they pull it out and plug the leak and you are driving again.

No, it's not like that. It's not like the kid's balloon popped by a cigarette in the carnival scene in
Strangers on a Train. Nope. You can't make analogies. The housing bubble is complicated, and if you want a really good, close observation of the mess, check out "Housing Bubble 101: Sub-primal Scream," by Joseph L. Elkhorne. It's a very good piece. It doesn't pull any punches and it gives you a big picture as to how we all--well, not all of us--will be affected by the mess.

The ones who will not be affected are the ones who have the wherewithal to move their fortunes into gold bullion or foreign investments, or just sit on their cash in a Swiss bank account. In other words, some of the people who have been making a fortune off the housing bubble while it was growing and growing. Years ago, I used to say "everything is everything." (Thomas Pynchon? Kurt Vonnegut?) I know it wasn't my own, that's for sure, but it certainly helped--like Vonnegut's other refrain, "So it goes"--when I thought of the connections: the pension funds invested in the mortgage backed securities, the drop off in sales at home improvement stores and the layoffs, which in turn feed into the inability to pay the mortgage. "So it goes."

Aug 13, 2007

You Think Cereal is Expensive Now?

The next time you go to the supermarket--or even better, your local warehouse place, Costco, Wal-Mart, Smart &Final, etc--and start shaking your head at the outrageous prices of cereal like I have been doing for nearly ten years now, think "Ethanol" as you plunk down the money. That's right, ethanol--you know, that miracle fuel that is supposed to help us get over our "addiction to oil" as George W. Bush puts it--well, it's all part of the same gaming that's going on in our Subsidized Capitalistic version of Socialism. Ethanol is 25% less efficient than gasoline; its pollution is more corrosive than gasoline; after the total expenditure of energy to make the ethanol, the net effect is actually negative efficiency; and the latest subsidies for corn-based ethanol are driving food costs higher and higher. People in Mexico are rioting and complaining that the price of tortillas has doubled. When I was a kid, corn flakes represented the cheapest food money could buy.

Well, it all hangs together, and if you want a good education about how it all works, take a look at the lead article at F.W. Engdahl's website, Geopolitics-Geoeconomics. The article is entitled "Buy Feed Corn: They're About to Stop Making it." (It is originally published in Financial Sense.) Engdahl is a former oil man who wrote a great book--long out of print but now available again--called A Century of War: Anglo-American Politics and the New World Order (1993), and if you want to get an education about the history of the oil business, read it. It takes ten minutes, but it's one of the best ten minutes of education you will get.

When you consider how farmers are rushing to get the subsidies for growing corn for ethanol and buying more petroleum-based fertilizer to grow it, causing more ground and water pollution, more dead spots out in the Gulf of Mexico below the Mississippi Delta; and down in Brazil they are clearing more forests for planting crops to produce bio-ethanol (thereby eliminating trees that consume carbon dioxide), you'll begin to wonder how we will ever get out of this terrible dependence on petroleum.

Aug 3, 2007

UPDATED Below--make sure you read it.

You may start hearing the latest
Bushit which says that the “surge” is working. Why? Because the number of US military deaths in Iraq for July were less than in June. I don’t know about you, but my basic understanding of statistics tells me that one measurement is not enough to produce a trend.

Before you are tempted to believe that well maybe the surge wasn't that bad an idea, add this little bit of information to the spin. According to
AFP (Agence France-Presse, the oldest news agency in the world), as posted on Yahoo:
BAGHDAD (AFP) - At least 1,652 civilians were killed in Iraq in July, one third more than in the previous month, according to figures compiled from three Iraqi ministries and seen by AFP. July's toll is also slightly higher than the number for February, when the United States launched a "surge" aimed at flooding the Iraqi capital with troop reinforcements to stem Iraq's sectarian bloodletting. In that month, 1,626 civilians were killed according to the ministries' figures.
It seems to me that with a contra-indication like this, in support of a trend, the good news of success that the Main Stream Media and the right wing is tooting and pooting about this week should at least be tempered. But I have yet to see anyone present this civilian death number alongside the lower combat death number.

So don’t believe all the
bushit you see or hear. Especially if you listen to NPR or PBS looking for a corrective to the Fox/CNN/ABC/CBS/NBC “news” you probably won’t find it there either. But then on the other hand, you know those Frenchies–they can’t be trusted. But actually, don't use me only--look at Glenn Greenwald's posting today on how the mainstream media is reporting the success of the surge. Just click on Glenn Greenwald in the Link List to the right.

PS: Have you heard the latest about Mitt Romney? He's starting to talk about Hezbollah as an example of good diplomacy. Yikes! I'll try to track that one down. It escapes me. Better find it before one of his staff points out that he might not want to make statements like that and still want to double the size of Guantanamo.

To supplement Glenn Greenwald,
thanks to Juan Cole, whose website I just checked before hanging it up for the night, here's a link to Brian Whitaker at The Guardian putting all the information together in a meaningful way. You will definitely not find this on NPR.