'A pen warmed up in hell' | Reality-based commentary about Phoenix, Arizona, and the nation.
26Our weekly open thread, seeded by Rogue's Front Page Editor and Director of Competitive Intelligence. (His printable comments are in parentheses). Join in on the comments. Conversation starters:
• Proposed changes to Social Security would make a majority of seniors 'economically vulnerable' || Economic Policy Institute
• Booz Allen — the world's most profitable spy organization || BusinessWeek
• Paul Krugman: How are these times different? || NY Times
• In Syrian chemical weapons claim, criticism of lack of transparency || Washington Post (Niger yellow cake?)
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31James Hamilton on the Econobrowser blog recently offered a post titled, "The Death of Peak Oil." It pivots off an article by Colin Sullivan wondering if it has "gone the way of the Flat Earth Society." Sullivan continues, "Those behind the theory appear to have been
dead wrong, at least in terms of when the peak would hit, having not
anticipated the rapid shift in technology that led to exploding oil and
natural gas production in new plays and areas long since dismissed as
dried up."
Hamilton does a capable job of dismantling Sullivan. Comments from the expert readership of the Oil Drum do excellent mop-up. Still, the exchange seemed an opportune time to re-examine where we stand on several fronts amid what I had termed the Great Disruption. This blog shouldn't be a church. It is not a prisoner of any closed-loop ideology. I don't have all the answers. We should always remember the exchange John Maynard Keynes had with a man who demanded to know why his position on a certain issue had shifted. Said Keynes, "When the facts change, I change my mind. What do you do, sir?"
After all, no less an authority figure than the President of the United States has assured us that America has a one-hundred-year supply of natural gas and his administration is fast-tracking all manner of fossil-fuel production. Approval of the Keystone XL pipeline to bring tar-sands oil from Alberta to the refineries of the Gulf Coast seems a given. The housing industry is coming back, even in the overbuilt suburbs of places such as Phoenix and California's "Inland Empire." The recession slowed "job sprawl," but hardly stopped, much less reversed it. New freeways are being built. American life is going on much as before 2008. Could it be that all the notions of a "great reset" in the wake of the crash were magical thinking?
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Part of the Shanghai skyline.
By Emil Pulsifer, Guest Rogue
Those who fail to learn from history are doomed to repeat it.
Before China became the leading developing nation, there were the Asian
Tigers: Hong Kong, Singapore, South Korea and Taiwan. In the late 1990s
a financial crisis gripped Southeast Asia that threatened to spread
into a global financial meltdown.
In many significant respects, the parallels with China are eerily
disturbing. While it is true that there are important, fundamental
differences which preclude an exact replay, there have been other
developments since that time, such as growth in the derivatives
market and the securitization of debt which have the potential to spread
financial contagion. Leverage is a fearsome thing, and risk
predictions are notoriously unreliable and often consider only the
initial stages: we have only to look at the recent example of the Great
Recession, in which a small but very sick portion of the U.S. housing
market spread to the national housing market and thence, via securitized
and bundled loans, to the global financial system.
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