Archive for October, 2008

The “Credit Crisis”, The “American Dream” And Why The Rest Of The World Is Paying.

October 29th, 2008 No comments

The “Credit Crisis” is a typical financial bubble trying to burst. Over the last decades the USA’s soaring trade deficit has been financed by the issuance of federal debt which has been sold to (mainly) foreign investors. The money issued against this debt was passed on to commercial banks to lend to their customers. The resulting boom in asset prices in the US economy has been completely false and was certain to collapse. The “securitisation” of the loans, whereby huge lots of loans are packaged up and sold off on the open market (again largely to foreign investors), has exported these bad credit risks to financial institutions the world over.

Over the last year the Bank of England the European Central Bank and the Japanese Central Bank have issued thousands of billions of dollars of credit lines to the banks in their respective jurisdictions as Banks began trusting each other less and less: those on the inside knew this bubble was bursting and they knew the outcome was far from certain. The central banks efforts failed which is why we now have wholesale partial re-nationalisation of banks taking place worldwide.

All of this is to try and prop up the value of the dollar and have been successful in the short term if you look at recent months performance of the $ vs the Euro and British pound. However in the long term this deals with none of the underlying problems: The American Dream is the embodiment of greed into a personal, social and corporate ethic. This dream, this greed, means – as I said on 26th July last year – that “the American economy has been running on cheap oil and foreign money for years” – for the dream is just that: a dream.

The American economy has not produced enough to meet it’s own “needs” (read greed) for decades. Now that is coming home to bite America and the rest of the world in the ass. The other major central banks are utterly afraid of the dollar falling in value. The $ denominated investments they own would lose value, the global economy would risk collapse if the dollar fell. But the truth is the global economy is facing collapse anyway and all of the actions being taken at the moment merely stay the day when the chickens will come home to roost.

Actually the current actions are exacerbating the problem by increasing money supply when an excess of money supply has been the root problem all along. Not only that but they are doing so via injecting more cash into a bunch of failed institutions. This just means that the situation will become even more strained before it starts getting better. the depth of the global recession that we are now entering into is going to be beyond most peoples’ imaginations and deeper as a result of rescuing failing institutions rather than letting these badly managed institutions fail and giving the bail-outs directly to affected citizens. After all putting extra money in a bank does not increase the wisdom of the bank manager. It just lets him rest comfortably in his seat – whilst you have yours taken away by the repossession man acting on his behalf.

If the American government had done a better job of policing internal financial affairs and balancing their trade surplus by making real economic gains and not false credit fuelled gains we would not be facing this situation. If other world governments had got together and said, “hell, lets let America fall – why should our people pay for these mistakes?” – this would not be happening.

More to the point if people stopped choosing to be ignorant and greedy and instead chose to wise-up and downsize we would not be in this position. The ecology of the planet can not sustain current economic activity levels. This has been one of the fundamental triggers of this “systemic failure”. Systems fail when they are pushed to the brink. Through ignorance and greed both on the part of individual citizens, and the governments supposed to represent their interests, and a total lack of recognition of the ecological limits of this planet we have dug ourselves one very big hole. The imminent failure of the global financial system will lead to one of three outcomes: 1) some form of martial law in most major economies whilst the “norm” is forcibly re-established; 2) an agreed global re-drafting of economic and trading rules to produce greater equality and less of a wealth/poverty divide; or 3) The total collapse of current financial, governmental and social structures resulting in anarchy.

Given that the governments which are supposed to representing you are much more interested in protecting the wealthy – with whom they enjoy great free lunches you could never offer – unfortunately, that means scenario number one is the most likely outcome.


How Wrong Can A Respected Investment Analyst Get It? – Completely!

October 28th, 2008 No comments

From The Wall Street Journal “Market Watch”, March 27th 2008:

Richard Band is not someone who makes outlandish predictions just to get headlines.
So I sat up and took notice earlier this week when he wrote to subscribers of his Profitable Investing newsletter that the stock market was ready to “rocket higher” in an “uptrend that could carry the blue chip indexes to all-time highs by late 2008 or early 2009. Dow 16,000 here we come!”


Technical factors appear to have led Band to make such a bold prediction, which amounts to a 33% return for the overall market over the next 12 months. The first has to do with the stock market’s internal characteristics when it hit a low earlier this month. Band argues that that low possessed “many striking technical resemblances to the great bear market bottoms of the past.”

I wonder what the guru says now? Technical factors even back in March suggested the DJI was going south and not north. Some people are blinded by their own stupidity, some just by plain wishful thinking.

Categories: Economics, Life, Politics Tags:

Alan Watts, CERN’s Large Hadron Collider, The Nature Of Reality and Nostradamus: Flee, Flee Geneva.

October 28th, 2008 No comments

In a recent blog comment posted here at Alan Gillis’ excellent blog “The Science of Conundrums” I analysed a Notradamus Quatrain potentially relating to the Large Hadron Collider at CERN near Geneva in Switzerland, thus:

“To call Raypoz the PositiveRay is a sound derivation, though it wouldn’t have been understood back then, with the only rays being ‘rayons de soleil’ or sun rays, sunlight.

What is the Opposite of Raypos? A negative ray.”

This analysis I believe to be incorrect based on an incorrect analysis of the French.

“Le contre Raypoz exteriminera tous”

“The opposing positive ray will exterminate all.”

Is a better translation. More importantly it leads us to a simpler conclusion than needing to invent a negative ray from somewhere:

Nostradamus is merely pointing out that the opposing positive rays colliding in the LHC will exterminate all in Geneva.

Why? The LHC creates “contained” nuclear explosions by colliding two positively charged rays of particles. The explosions are contained in huge magnetic fields. The field strength needed for these magnets is calculated using current theoretical physics.

The problem is that the LHC experiment is testing the boundaries of the same theoretical physics that was used to calculate the magnetic field strength needed to contain these explosions.

They have probably got it wrong.

The Nostradamus Quatrain:

Migrés, migrés de Geneue trestous,
Saturne d’or en fer se changera,
Le contre Raypoz exteriminera tous,
Auvant l’aruent le ciel signes fera.

The usual translation:

Leave, leave Geneva every last one of you,
Saturn will be converted from gold to iron,
Raypoz will exterminate all who oppose him,(?)
Before the coming the sky will show signs.

My translation is that the third line is incorrect and should read thus:

Leave, leave Geneva every last one of you,
Saturn will be converted from gold to iron,
The opposing positive rays will exterminate all
Before the coming the sky will show signs.

This morning, co-incidentally, I am re-reading a wonderful lecture by Alan Watts called “The Nature Of Consciousness”. There is a lovely passage where he is culminating his description of the “ceramic” model of the universe and it’s flaws. This is the model (slightly altered by the removal of “God” from the picture) is the one the scientists at CERN are exploring:

But when you want to apply that image to the universe itself, to the very nature of life, it has limitations. For one thing, the idea of a difference between matter and spirit. This idea doesn’t work anymore. Long, long ago, physicists stopped asking the question ‘What is matter?’ They began that way. They wanted to know, what is the fundamental substance of the world? And the more they asked that question, the more they realized the couldn’t answer it, because if you’re going to say what matter is, you’ve got to describe it in terms of behavior, that is to say in terms of form, in terms of pattern. You tell what it does, you describe the smallest shapes of it which you can see. Do you see what happens? You look, say, at a piece of stone, and you want to say, ‘Well, what is this piece of stone made of?’ You take your microscope and you look at it, and instead of just this block of stuff, you see ever so many tinier shapes. Little crystals. So you say, ‘Fine, so far so good. Now what are these crystals made of?’ And you take a more powerful instrument, and you find that they’re made of molocules, and then you take a still more powerful instrument to find out what the molocules are made of, and you begin to describe atoms, electrons, protons, mesons, all sorts of sub-nuclear particles. But you never, never arrive at the basic stuff. Because there isn’t any.

I think Watts is right here. there is no basic “Stuff”, just energy manifesting in different patterns that appear to be stuff. This is a very Buddhist interpretation of reality. Reality is there – it’s just not the reality we “think” of it as. The Scientists at CERN are looking for “Stuff”.

This is why I say the scientists at CERN have probably got it wrong and are messing in ways that they do not comprehend with matters/energies they do not comprehend. The fact that they do not comprehend them is of course proved by the fact that they are conducting “experiments”. Also that they spent $X billion on a machine that broke after two days and will take six months to fix is worrying. Let’s hope it keeps having these little failures and setbacks for a long time to come. Hopefully some bright spark somewhere will do the mathematics that proves the danger of their efforts before they ever switch it on fully.


Buddhism And The Credit Crunch

October 28th, 2008 No comments

Buddhism tells us that we will suffer for our passions, our greed, our hatred and our ignorance. Out of ignorance of how money really works many people have seen their house price soar, borrowed money against it and indulged their passions, greed and desires. They never believed that the floor could fall out from under them as the house price bubble burst.

Well now it has burst. People will be angry at the banks that foreclose on them and literally pull the rug out from under their feet, the governments that allowed this to happen and anyone else they can pick as a scapegoat.

Buddhism tells us not to get drawn into the materialistic world of fulfilling our desires but instead tells us that by looking within and cultivating certain virtues we can be happier people whatever the ups and downs of life bring. We can develop insight – into how our minds and bodies function, how we are conditioned into reacting in certain ways and how we can, through this very insight, undo that conditioning. We can become wise and overcome our ignorance. Through understanding the roots of anger and hatred we can overcome these too.

Buddhism suggests a simple life is probably a more fulfilling one. Yet that is only true if one is awake to each moment of life and able to achieve the fulfilment of each moment. As long as one is haunted by the nightmares of the past or dreams of the future one is distracted from now. As long as one is consumed with desire or anger one is distracted from now.

There will be a lot of very unhappy people acting out of fear, anger, desire and ignorance in the coming weeks and months as the full impact of the credit crunch takes bite. Most will react like lemmings – from their conditioning. So attached to their million pound home, now worth half that, their fancy car they can not afford to run these people are failing to do now what is the only way through a credit crunch: Cut back quicker and better than anyone else does. Either that or start the credit crunch filthy rich so credit is not an issue for you at all. In depressions the wealthy tend to accumulate much more wealth whilst the poor lose what little they have.


Computer Paint Job Mod – Recycling A PC For A Nursing Student

October 28th, 2008 No comments

My latest PC job, a charitable donation to a student nurse, built on an old Pentium III 733Mhz but with 128M graphics card, 512M ram, a creative soundblaster live and an nlite’ed version of windows 2000 she runs sweet as a nut.

Plays fullscreen DVD’s, websurfing, music, camera’s and editing photo’s. Most people buying PC’s today could do what they want to do with a good five year old machine. This is the madness of our consumer society. Unless you want to play the latest games or are working with graphics/music on a semi professional level there is no point wasting money on a new PC when your old one with a little love and upgrading is good for two more years. This one also got a blue and silver paint-job including the mouse and keyboard (not shown here) as I strongly dislike beige boxes.

Categories: art, Computers, Life Tags: