Credit Creation Problems Worsen

We have the very queer situation whereby many of the top central banks of the G7 nations are running ZIRP (zero interest rate) lending coupled with massive, massive government borrowing.  A number of nations are entering ‘debt red zones’ such as Greece, Ireland, Iceland, England, Spain, Italy, all the Warsaw States as well as parts of the former USSR as well as the top 2 economic powers, the US and Japan.  The banking credit crisis is morphing into a series of potential and actual national debt defaults.

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As it seems that economies are pulling out of the hole thanks to China’s economic growth, it is easy to overlook the next step in this Great Depression.  That is, we have to now consider the awful truth about too much government debt due to too lax lending on the part of the central banks of too many countries.  The reason it is hard to buy one’s way out of a depression is due to the nature of credit: eventually, someone has to save money that equals the money created via credit.

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This is all about balancing the books and is very much a Libra operation.  Viewing things through the lens of past philosophical knowledge is a good thing.  We are not doing anything much different, essentially, than past things done by people.  Even as we accumulate knowledge and data, our fundamental mental and emotional infrastructure in our brains remains mostly unchanged.

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There has been no evolutionary changes that change the way we process information and how we emotionally react to incoming information.  A fine example of this is how we process contradictory incoming information.  We just saw a global push aimed at getting an immense carbon pollution derivatives market rolling which happened to coincide with one of the nastiest and colder winters in the Northern Hemisphere.

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Many countries filled with people who were told that the planet is warming, are now locked in ice and snow.  Today, incidentally, will be the first time in weeks that my own part of the world is going to be 2 to 3 degrees above freezing before plunging back into abnormally cold temperatures again in three days.  So the global warming people are yelling at everyone who is freezing, that we are getting hotter.

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This, in turn, causes rage and despair as people collectively decide to ignore CO2 problems.  The global banking system for lending dropped into freezing up last year and the only way this could ‘warm up’ was to have wild government spending.  And governments can’t overspend unless they pay virtually no interest on loans to governments.

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The entire concept of lending is based on risk: the lenders have to have enough capital in order to pay off bad loans!  Generally speaking, bankruptcies should be rare events, less than 1 or 2% each annual cycle.  But in order to achieve this, lending has to be sufficiently cautious and parsimonious so that it doesn’t rise above this percentage.  This is the natural brake on lending that is supposed to kick into gear when too many entities borrow too much money too fast.

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Someone has to calculate the chances of default and deny loans.  But this causes economies to slow down so the temptation is to ignore dangers of default and to borrow to that magical point I call ‘infinity’.  All systems desire to go to infinity.  There is this balancing mechanism running against banks seeking to go to infinity: as they race towards this, the value of all their holdings will suddenly either decline to zero via loss of value of the units denoting wealth or there is this sudden event whereby over 10% of the borrowed money goes into total default and is never repaid.

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The ‘fix’ created by the geniuses who wrecked modern finance was to create the Derivatives Beast.  All knotty problems that are hard to solve are fixed via trading the risks or the pollution.  This never fixes anything because when it actually comes to some entity being forced to pay for bad loans or bad pollution, no one wants to pay.  Everyone wants to profit.

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The natural and deep human emotion to always win and never pay for losses rises to the surface very rapidly.  If anyone notices that people who play in the Derivatives market as the insurer of risk ends up bankrupt, no one will want to pay for losses!  Which means, no one can sell their risk!  Which leads to the market falling to zero value.  This thing still exists and is immense, no one has any real idea how big it is anymore.  All we know is, no entity, not even the biggest creditor nation, China, can afford to pay off bad debts or bad pollution costs.

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So, I have, as proof of my ongoing thesis, a series of stories about sovereign powers going bankrupt.  This is most serious.  The attempt at stopping CO2 pollution is going to run headlong into the reality that we are in a global contraction and fixing CO2 pollution will cause massive bankruptcies of both businesses as well as entire countries in the major manufacturing sectors.

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By the way, at the Independent in England, they ran another goofy editorial where a global warming believer attacked anyone who is freezing to death and not believing things are warmer, someone commented at  Ben Chu: There’s a good reason why climate naysayers are failing with this:

2009/12/25 08:32 – Core CPI Falls 1.7% In Nov

TOKYO (NQN)–Japan’s core consumer price index fell 1.7% year on year to 99.9 (2005=100) in November, marking the ninth straight month of decline, the Ministry of Internal Affairs said Friday.

After the immense credit bubble of the late 1980’s popped in Japan, it has had mostly deflation.  There was a faux deflation period in the mid-2004-2008 period.  This is when inflation was well over 2% but the Bank of Japan kept rates stubbornly at ZIRP levels.  Japan’s accumulation of government debts kept going while Japan continued to being a global creditor nation due entirely and ONLY to the fact that Japan was one of several major export profit power centers!

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That is, China, Germany and Japan were the three nations vying for top billing as export profit centers.  Trade between these three giants also increased greatly with each other.  All three focused very hard on flooding the US with their exports, too.  The two major banking centers of the earth, the US and UK, both were content with running their own economies in the red.

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This very much offends Libra!  She likes to balance things.  And if anyone seeks to evade balance, she throws down her scales and draws her sword. She then kills everything in her path until some sort of crude balance is achieved.  This is why we must respect her vast powers.  We can’t cheat our way out of things for she can see reality very clearly and can act on her own even if we scream at her to stop.

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The global warming people warning us about CO2, for example, want to balance things to maintain our present status quo.  Except we are in an unbalanced natural system which teeters between Ice Ages and Global Warming and fixing ourselves on the correct side of this is very difficult.  Especially since humans want to multiply beyond the carrying capacity of the ecosystem.  We can take the concept of Libra drawing a sword and killing: the US, which is going rapidly bankrupt, is engaged in killing off Afghani peasants.  Who happen to have virtually the #1 birth rate in the world!  See how this operates?

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Back to Japan: for 15 years, I have yelled that the world’s #2 economy, Japan, can’t run in a depression forever without dragging the entire planet into a depression.  If Japan ceases to be the #2 economy and joins Britain as a dead industrial power, its ability to destroy the world economy will fade.  Just as the day the British central bank gives up and ceases to be an international player in global credit markets, we will see global banking recover.

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Japan can’t be the #2 economic power while dying anymore than Britain can be a powerful bank while running all systems in the red and thus, having no national capital to base its lending on.  And obviously, the world’s #1 economic power, the US, cannot run all systems deeper and deeper in the red while deindustrializing itself to zero.  This is obviously impossible as well as insane.  So long as humans can push some impossible system forwards, they will do this if it is the present status quo.   For a status quo, by definition, can and do continue passively forwards due to inertial forces.  This ends with the sensation of falling off a cliff or running into a brick wall, of course.

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UPDATE 1-Govt urged BOJ to respond to deflation -Nov minutes | Reuters

A government representative urged the Bank of Japan to make efforts to beat deflation at a rate review in November, minutes of the meeting showed, underscoring the simmering row that later nudged the bank into loosening monetary policy further.

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After the meeting, the BOJ upgraded its assessment of the economy despite grumbling from the government worried about deflation and the risk of another recession.

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Perhaps I could suggest that the Japanese status quo whereby it exports to an increasingly too deep in debt US market has hit an invisible brick wall.  That is, the US isn’t able to give Japan true credit in return for destroying most of our domestic manufacturing so Japan is accepting paper credit chits called ‘dollars’ in return for no future hope of repaying the trillions owed to Japan in the form of real trade such as handing over our entire markets and all value of all things in the US…this is because the US owes China much more than Japan.

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Now, as anyone goes bankrupt, the biggest creditors are paid first!  Since China is by far the biggest creditor holding all forms of US debts, then China gets first cuts in chopping up the US when the US goes finally bankrupt. Why is this?

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Two reasons:  China can force a bankruptcy by throwing US debts and IOU dollars into the global markets and have these drop to zero in value, thus destroying all debts held by others.  And secondly, unlike Japan, China is a sovereign nuclear power with a large land base that can’t be nuked totally, very easily.  Japan’s operations are nearly all concentrated in one very small geographical area.  Japan is in a great hurry to fix all of this by shifting its economic focus to China.

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I have detailed this process for quite a while.  And in the last three months, these negotiations of our two biggest creditors has increased immensely.  As we clearly saw in the Copenhagen meetings, as the US and UK both railed against China and the EU whined, Japan was silent.  And I also noted that the Japanese sent 600 negotiators and diplomats to China during December and China sent Xe to see the Japanese Emperor (he did NOT bow, either).  Then, Hu sent both Xe and Wen to Copenhagen to display Chinese power.

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asahi.com(朝日新聞社):Toyota asks suppliers to cut prices – English

Toyota Motor Corp. asked its auto parts suppliers on Monday to slash at least 30 percent off the price of some parts for cars slated to hit the market in 2012 and 2013. It is the first time in a decade the company has requested affiliated part suppliers for such a large price reduction.


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Japan is the world’s #1 auto manufacturer!  This is immensely important!  And if they are forcing 30% cuts from suppliers, this is obviously going to hammer all other entities involved in this industry.  Why is Toyota doing this?  Well, two reasons: the world auto market still struggles and China is now competing directly with Japan for Chinese auto markets.

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And here is the other funny thing: Japan, Germany, China and the US all are very big on growing auto markets!  Even as the US commits industrial suicide and is rapidly vanishing as a global auto power, buying of cars in the US has barely dropped while it doubles in China every 2-4 years!  China is the growing market while Japan buys fewer cars of any sort as the country grows smaller.  At the same time, vehicles are a major problem in the CO2 gas accumulation problem.

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So the Copenhagen solution is ultimately to be, killing world auto use dramatically!  The bankers sole reason for joining the anti-CO2 crusade wasn’t to kill CO2 production but rather, to tap into the growth of CO2 pollution due to auto making rising in Asia thanks to China.  That is, China is the world’s biggest creditor power and if the bankers working in dying economies in the West could tap into the growing Chinese market for consuming oil, this, in turn, would enrich these bankers while providing no real services of any sort to anyone.

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People get mad at me for not jumping on the Copenhagen band wagon but reality says, this is a futile operation designed to cheat everyone instead of fixing any problems.  And if we refuse to understand how sovereignty and banking works, we will be very sad when we discover that nothing has been ‘fixed’ while wealth is concentrated in the wrong hands (ie: not going to the workforce of the world but rather, the bankers).

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Debt-laden Japan shocked by £630bn spree to ‘save lives’ – Times Online

Yukio Hatoyama, the new Japanese Prime Minister, has stunned a nation already mired in huge public debt by unveiling the country’s biggest ever postwar budget: a 92.3 trillion yen (£630 billion) spending spree aimed at “saving people’s lives”.

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The unprecedented budget, which supposedly shifts Japan’s fiscal spending focus “from concrete to lives”, comes amid rising concern about the solidity of sovereign debt in the world’s second-largest economy.

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The new budget will require additional debt issuance of Y44.3 trillion — within the Government’s expected band, but still at a level that will raise Japan’s debt-to-GDP ratio to nearly 195 per cent….

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The budget plan will contain Y53.4 trillion in policy spending; 51 per cent of that will go to social security programmes. This is the first time that social security has received more than half of policy spending, reflecting the new Government’s focus on jump-starting consumption rather than the big public works projects carried out by former administrations.

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OK: in the US, we hear constant warnings that spending money on social systems is evil and should be cut.  Yet, half of government spending is on wars and our military!  And ditto, Japan!  Japan has been at war since 1945: a trade war with the US which Japan won, hands down!  But the cost of this war has been just as steep as the US wars with Muslims across the entire planet.  That is, social spending was squeezed out and now the domestic economy is dying.

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The US is following similar logic: the status quo is set so that we MUST spend money on our military/industrial complex because it is the last manufacturing base we have.  But spending this money is destroying our international standing in trade and finance!  So we have to stop!  Only, if we do, our entire economy will collapse.  Japan must export like crazy or it, too, will collapse.  It is NOT enriching the Japanese working class, this group is being totally crushed.  And we see the outlines of a very serious problem in the top economic powers on earth and both are trying to borrow their way to prosperity in different ways but ways which mirror each other.

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For both the US and Japan are in increasingly vile negotiations over the issue of US military bases in Japan and over who will pay for them!  This brings all the issues starkly to the fore.

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Aiful Credit Swaps Ruling May Come Next Week After UBS Request – Bloomberg.com

UBS AG’s request for a ruling on credit contracts linked to Aiful Corp. was accepted by an international group governing swaps and derivatives, paving the way for debt holders of the Japanese company to get repaid.

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The determinations committee of the International Swaps and Derivatives Association may decide next week whether Aiful’s restructuring agreement with creditors is considered a “credit event,” which would ensure payouts to holders, according to a statement on the association’s Web site.

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Aiful is an awful Japanese domestic lender who is going bankrupt because the Japanese workers who borrow from this bank are going bankrupt.  As all the major businesses slash and cut everything to ribbons, of course, the workers are the ones being sliced and diced.  This, in turn, leads to death, doom and destruction that boomerangs back on the top bankers and manufacturers of Japan.

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Japan’s woes continue to worsen as the status quo is unsupportable.  Now that yet another major G7 lender goes under, the issue of who pays the Derivatives Beast arises yet again. And the answer, as always is, no one wants to pay up and if they even try, they, too, will go bankrupt because no one has anything near the capital to insure that all debts are paid in full in the case of default!

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This, in turn, is being shoved into the laps of the governments who host all of this reckless lending.  And this lending, in turn, is in trouble due to cuts in incomes due to the Great Depression II.  So we see here a queer argument, as to wether or not the bankruptcy of this Japanese lender is a ‘credit event’.  HAHAHA.  It obviously is but lawyers are hard at work, trying to use magic to make it not trigger another Derivatives Beast feasting event.  For the Beast works for Libra.  That is, it eats and destroys all credit created recklessly.  It does NOT protect anyone.

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Japan is desperate to grow in Asian markets but WWII keeps rearing its bloody head.  Japan never bothered signing treaties with Asian nations concerning various territorial events because the US was protecting Japan’s territorial pretensions while at the same time, was either hemming in, in a war stance with or also protecting Japan’s territorial rivals such as China and South Korea or even Russia.

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Now, this is all coming to the fore again and the US military and economic power fades, these diplomatic problems are rising rapidly to the surface again: S Korea-Japan territorial dispute flares up again › Japan Today: Japan News and Discussion

South Korea said Friday its relations with Japan could suffer because of a newly published teaching manual that asserts Japanese control over islets that Seoul also claims. The new manual, released Friday for high school history teachers, says Japanese students should be taught to deepen their understanding of their country’s territorial claims based on what they’ve learned from middle school, according to South Korean media reports.

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The Japanese retreated on the issuance of this book after China growled that it was looking into similar matters with Japan.  The Japanese were hoping no one would notice.  This sort of belief is a sign that Japan isn’t thinking sanely but is running on two tracks at once: trying to an international broker while clinging to the concept of imperial territorial power over its neighbors. This is impossible and the US sword won’t enforce Japanese pretensions.  For we are going bankrupt.

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Kyodo News – Story

Japan’s ties with the United States are expected to be put to the test in 2010 as the country struggles to settle a row over a U.S. military airfield in Okinawa possibly as a step toward reshaping the decades-old bilateral alliance following Tokyo’s historic change of power.

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In contrast, the new Japanese government’s pro-Asia stance, as seen in its ”East Asian community” concept, could bring the region closer together, but experts say that a quick breakthrough is unlikely in long-standing territorial and other disputes with China and South Korea.

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To raise its presence in the international arena, Japan may also explore ways to further contribute to global security, such as through active participation in U.N. peacekeeping missions.

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This article shows that Japan is struggling to understand its changed circumstances.  But it is a long ways from truly understanding how bad off its international position really is.  Joining UN peace keeping won’t turn Japan into a modern military power due to the fact, it has virtually no peasant population to draw on for soldiers it can kill in wars.

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Gilts sell-off as Britain joins Italy in debt house – Telegraph

The yield on 10-year gilts spiked Wednesday to 3.97pc, 46 basis points higher than costs on French bonds. Britain and France were neck and neck as recently as last month, before Labour’s pre-Budget report raised deep concerns among Chinese, Arab, and Russian investors about the credibility of British state. But what has caught market attention is the narrowing gap with Italian bonds, once mocked as the symbol of an ill-governed nation in thrall to the Dolce Vita.

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And what is going on in Britain? 2009? Some years are best forgotten, says Queen in Christmas address – Times Online is rather funny, the Queen thinks this year was pretty bad.  Well, she saw NO drop in her own income.  Her own welfare has been protected from the collapse of her kingdom.  Indeed, she wants a hike in her own income!  Not only that, the British people are still happy having this harpy mooch off of them!

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Instead of downsizing the monarchy to reflect the true status of Britain as a dead empire and has-been power, the British cling to the US empire in the hopes this will cause Britain to look like a giant and not a pitiful midget.  Japan, for example, won’t send a single samurai to Afghanistan to die while Britain is the only US ally that sends its own soldiers to perish there.  At this point, one a day is killed, sometimes by British soldiers shooting each other.

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Britain, I would suggest, is more delusional than Japan.  The WWI and WWII victories were Pyrrhic.  Instead of admitting this, the British cling to the last shreds of imperial pretensions in the hopes that riding along with the US will lead to a revival of their own fortunes.  This seemed to be a good thing during the easy credit years but now is proving to be an illusion.  And now to the biggest mess of them all, the US debt problem:  Treasury Yield Curve Steepens to Record on Debt Demand Concern – Bloomberg.com

The difference, or spread, between 2- and 10-year note yields widened to 2.88 percentage points on Dec. 22. The previous record of 2.81 percentage points was set on June 5, when Treasuries plunged after a government report showed the smallest decline in U.S. payrolls in eight months. Ten-year note yields touched 4 percent the following week, the highest level in 2009….

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Holders of U.S. Treasuries of all maturities have lost 3.3 percent this year, according to Bank of America Merrill Lynch indexes. That would be the worst performance since 1994…

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…President Barack Obama is borrowing unprecedented amounts for spending programs. U.S. marketable debt increased to a record $7.17 trillion in November from $5.80 trillion at the end of last year. Treasury officials on Nov. 4 announced a long-term target of six to seven years for the average maturity of Treasury debt and said the department wants to cut back on its issuance of bills and two- and three-year notes.


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People get confused when they read about US debt.  The debts sold on open markets has risen to ‘only’ $7 trillion but this is due to raiding Social Security overpayments begun under Reagan.  That is, $5 trillion of US past debts were covered by Social Security raids!  And this is ENDING.  As the baby boomers retire and as the US economy continues to collapse, this leads quickly to a crisis.  That is, paying retirees depends on ceasing to run up debts for the government overspending and paying off to people who patiently paid into the SS system for so many years!

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All rational observers of the US debt situation know that this is a big, big problem.  And one that is more important to individuals in the US rather than the theoretical global warming problems.  And the CO2 derivatives market will not fix this problem, either.  It will make it much, much worse.  That is, the elderly in the US will be forced to either freeze to death or starve to death to pay for CO2 reductions.

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Holland’s Plan to Cut Traffic: A Tax on Every Kilometer Driven – TIME: here is more proof that the CO2 problem will be fixed with higher prices and much higher taxes.

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Gas shortage spreads to northwest China-Xinhua | Business | guardian.co.uk

China’s gas shortage has spread from southern and central parts of the country to Shaanxi province as many northwestern cities were hit by a sharp temperature drop recently, Xinhua news agency reported on Friday.

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OK: read this news carefully, everyone.  This is global COOLING at work.  The sun is very quiet.  And the global warming group’s attempts at minimizing the role the sun plays in the climate are being totally proven wrong here.  I hope they can learn a lesson in all of this.  And note also, the northern Chinese who are freezing aren’t looking forwards to freezing to death to keep balmy places happier, either.

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China Raises GDP Growth Estimates, Narrowing Gap With Japan – Bloomberg.com

Gross domestic product was 31.405 trillion yuan ($4.6 trillion) last year, the statistics bureau said at a briefing in Beijing today. That compares with a previous 30.067 trillion yuan and the World Bank’s estimate of $4.9 trillion for Japan.

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China’s expansion will be more than 8 percent in 2009, according to government officials, and the nation is poised to overtake Japan next year, International Monetary Fund projections show. Today’s figures result from an economic census which showed a bigger contribution from services and continue a pattern of China revising up preliminary growth estimates.

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“The big underlying factor propelling China’s growth is the continued migration of people from the agricultural sector to the more modern economy — industry and services,” said David Cohen, an economist at Action Economic in Singapore. “There’s no stopping China.”

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Japan emptied out its countryside which is increasingly deserted.  This week, several cute Japanese women went to the rice paddies to pose in faux-farming outfits that aped US working clothes which are also increasingly out of step with reality in the US.  Japan won’t let in much or any emigration so the movement of peasant to worker has slowed to a crawl.  While in the US, it is fueled nearly entirely by migration of peasants from the Southern Hemisphere and Asia to the US labor markets.

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But this is dwarfed by the movement of young people from the farmlands of China to the big cities!  As I keep pointing out, labor is wealth.  Not lending.  Lending is the illusion of wealth.  Labor coupled with resources is the real treasure chest.

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Goldman Sachs CEO Lloyd Blankfein Named Financial Times Person Of The Year

Goldman Sachs CEO Lloyd Blankfein has been named Person of the Year by the Financial Times. The investment bank “not only navigated the 2008 global financial crisis better than others on Wall Street,” the paper writes, “but is set to make record profits, and pay up to $23BN in bonuses to its 31,700 staff.”

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And this is why Goldman Sachs has to be broken up into very small pieces.  I will note that the comments about the Financial Times praising these crooks were nearly 100% against this honor.  A lot of people want these pirates arrested.  And for good reasons.

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Taxpayer Burden Eases to $8.2 Trillion as Obama Supplants Fed – Bloomberg.com

Congress and the Obama administration are taking a bigger role in the rescue of the economy from the Federal Reserve, shifting the strategy to stimulus spending from central bank lending.

.

The amount the Fed and U.S. agencies have lent, spent or guaranteed has fallen 15 percent since September to $8.2 trillion, the lowest in a year, based on data compiled by Bloomberg. Spending on infrastructure, tax breaks and other fiscal measures account for 52 percent of the total, up from 39 percent in March, as central bank loan programs are phased out.

.

The change marks a new phase of public intervention in the economy. Congress and the administration’s $4.2 trillion portion, which amounts to 30 percent of everything produced in the country this year, also complicates any future exit strategy. It may be tough for elected officials to quit spending, prolonging the bailout and adding to the federal budget deficit.

ΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩ

As our condition deteriorates, seeing the creators of this mess get richer is most infuriating.  And will lead to physical violence.  The US has to sell our debts to our dire trade and military rivals.  And this is pure, unadulterated insanity.  More insane than global warming fanatics yelling that the sun has little to do with our climate while we are all shivering to death in the cold as the sun stubbornly refuses to have much or any solar flares or sun spots!

ΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩ

Insanity can’t win all the time.  For Libra is sane.  She hates delusional thinking and will hammer anyone who tries this for very long.  Eventually, we all have to face reality.  And yes, there is CO2 production that is out of control and this is due to too many humans.  And yes, there is a need for credit and for lending.  But going overboard in any belief or system analysis means going off the cliff with a firm push from either Mother Nature or Libra.

ΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩΩ

So we negotiate the difficulties by balancing carefully all the different forces at work including the sun, of course, our major star that is nearest and dearest to us.  As well as avoiding going too deep in the Cave of Wealth and Death.

sunset borger

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36 Comments

Filed under .diplomacy, .money matters, nature, weather news

36 responses to “Credit Creation Problems Worsen

  1. RobG

    More on the Chinese snub to the West:

    Copenhagen was a disaster. That much is agreed. But the truth about what actually happened is in danger of being lost amid the spin and inevitable mutual recriminations. The truth is this: China wrecked the talks, intentionally humiliated Barack Obama, and insisted on an awful “deal” so western leaders would walk away carrying the blame. How do I know this? Because I was in the room and saw it happen.

    China’s strategy was simple: block the open negotiations for two weeks, and then ensure that the closed-door deal made it look as if the west had failed the world’s poor once again. And sure enough, the aid agencies, civil society movements and environmental groups all took the bait. The failure was “the inevitable result of rich countries refusing adequately and fairly to shoulder their overwhelming responsibility”, said Christian Aid. “Rich countries have bullied developing nations,” fumed Friends of the Earth International.

    All very predictable, but the complete opposite of the truth. Even George Monbiot, writing in yesterday’s Guardian, made the mistake of singly blaming Obama. But I saw Obama fighting desperately to salvage a deal, and the Chinese delegate saying “no”, over and over again. Monbiot even approvingly quoted the Sudanese delegate Lumumba Di-Aping, who denounced the Copenhagen accord as “a suicide pact, an incineration pact, in order to maintain the economic dominance of a few countries”.

    Sudan behaves at the talks as a puppet of China; one of a number of countries that relieves the Chinese delegation of having to fight its battles in open sessions. It was a perfect stitch-up. China gutted the deal behind the scenes, and then left its proxies to savage it in public.

    Here’s what actually went on late last Friday night ….

    What I saw was profoundly shocking. The Chinese premier, Wen Jinbao, did not deign to attend the meetings personally, instead sending a second-tier official in the country’s foreign ministry to sit opposite Obama himself. The diplomatic snub was obvious and brutal, as was the practical implication: several times during the session, the world’s most powerful heads of state were forced to wait around as the Chinese delegate went off to make telephone calls to his “superiors”.

  2. EconCurious

    Elaine,

    Would you consider putting together a list of Top 10 predictions for 2010? I know you consider yourself a prognosticator, and by the tone of your comments, you certainly seem to imply that we are not out of the woods with regard to our nation’s current economic malaise. At the same time, the pulse of the economy seems to be improving, albeit slowly, per a number of the major economic statistics. Perhaps we still have a few surprises in store for us? In any case, thought it might be fun to see your list. Have a nice holiday and stay warm!

  3. charlottemom

    Woke up to media blathering about a new terrorist act thwarted but few if any outside the internet are reporting on Geithner’s furtive fannie/freddie Christmas bailout. And wow – the implications!

    From Clusterstock: The Treasury snuck in another big bailout on Christmas Eve: It removed the cap on the amount of money it will provide to Fannie Mae and Freddie Mac to cover their ongoing mortgage losses. There is now no limit on how much we taxpayers will shovel down these black holes.

    The thieves do not ever sleep. An unelected Treasury official have obligated the American taxpayer to cover ALL freddie and fannie mortgage losses in perpetuity. Currently 20% of their loans are in default/foreclosure. Their loan obligations total 3 trillion (conservatively) so the sky’s the limit. Over Christmas, Americans were robbed of the financial futures…again

  4. charlottemom

    the above article posted by rob was written by Mark Lynas (spelling)

    From Market Ticker poster: This guy’s made his living pushing the global warming agenda, including writing three books. He has every reason to push for a high level of world concern about global warming.
    Unfortunately for him and the rest of the envirowackos, their data doesn’t hold up to scientific scrutiny. China’s likley done extensive research on global warming; they must have concluded that it’s a bunch of bull****.

  5. melponeme_k

    I always thought the reason Libra was blindfolded was because she was and could be a monster underneath. Like one of those inside out dolls. I had one that was Little Red Riding Hood on one end and the Big Bad Wolf on the other. The blindfold keeps her from becoming an agent of retribution and unleashing her son, Cerberus.

    So now that the CO2 scheme has collapsed what will happen now. Are there any new schemes in the making?

  6. emsnews

    Actually, Libra’s scales, in the Zodiac, were originally Scorpio’s claws. Scorpio is one of the oldest Death Gods.

  7. emsnews

    The new scheme is very simple: drain away all social care systems and have that blood money flow to the top international bankers one way or another, mostly via selling bad debts.

    The true monster remains the Derivatives Beast which was nicked but not killed this last year.

  8. Colin

    I was under the impression that Japan had already fallen behind China; as she has risen to number two. I believe that the offical $4.6 trillion gdp figures for china are understated by at least a third in real terms. Thanks again to that crazy Rembi/ Dollar link; everything in china is priced in dollars, but that takes absolutely no account of the fact that intrest rates are much higher in china and the cost of living much lower. That would be like converting all the sticker prices in america to euros but making everyone pay in dollars. Normaly gdp isn’t much different when measured nominaly or in Purchasing Price Parity, but in china’s case the difference is huge, due to that very distorting effects of the currency link. I also notice that china’s gdp always excludes Hong Kong and Macau (and Tiawan, but that’s obvious) – counting them is easily another 1.5 trillion!

    This leads me to two questions: is china delibrately trying to understate it’s economic power by excluding parts of it’s own territory from gdp calculations and alowing it’s gdp to be underestimated by distortions in how the figures are counted?
    And second, why, oh why, does america alow this deeply distorting link to go on (i suspect it’s too late to break it now), why didnt they break it ten years ago – surely anyone in their right mind can see that they may as well have made a murder sucide pact?

  9. emsnews

    We couldn’t break the link 10 years ago because all our trade partners were playing pretty much the same game.

    Now, the euro is much stronger than the dollar and despite the Japanese trying their hardest to make the yen 120 to the dollar, they failed (due mainly to China holding yen) and so it is now mainly China sitting on top of the US currency and we can’t do a thing about this.

  10. nah

    Japan can’t be the #2 economic power while dying anymore than Britain can be a powerful bank while running all systems in the red and thus, having no national capital to base its lending on. And obviously, the world’s #1 economic power, the US, cannot run all systems deeper and deeper in the red while deindustrializing itself to zero.
    .
    china can be nuked completely very easily… the old ‘world’ is not dead… the economics of trade are finding new ‘assets’… i suppose that could be serious assets or not… its really about the masses isnt it, finding a way to express trade in a populist form of management…
    .
    if people loose faith in fiat currency ‘as its been put into the void by the central banks’ new regulatory expression could find opportunity to analyze profit… but no-one knows as of yet if the ‘peoples credit’ will be enjoyed for X period…
    .
    thats the new risk… systemic
    .
    http://video.google.com/videoplay?docid=-181259944046452879&q=iluminati&total=111&start=0&num=10&so=0&type=search&plindex=4
    .
    its a fact the mystery

  11. sandy

    i would have to say that the “derivatives monster” was not even nicked, since taxpayers were forced to make the banksters “whole” again, and the government facilitates the continued looting, even guaranteeing salary raises for NEXT year.

    the only thing that has happened is that the debt has been shifted from the gamblers to a wider base, the taxpayer, who actually cannot afford the debt.

  12. emsnews

    I was referring to it not growing even larger. It is still of immense, amazing size but slumbered while the central bankers bailed out the gnomes.

  13. Lemme give you a clue as to why this has been a cold winter for USA: it is an El Nino year! El Nino has been known to bring a LOT of moisture: therefore lotto snow! Gee, amazing how simple it is, isnt it??

    I dunno where YOU live, but where I live in Europe in Bulgaria, our winter was 2 months late in coming after the hottest summer on record. We had temperatures in the 20s up until late November when we should have had our first snow.

    And starting on the 24 and continuing through 27 December we again had abnormally high temperatures, and the snow ALL melted and is gone now.
    So Global Warming IS real for me. I dont have to make shit up to lie; I been experiencing it for a while now.
    I dont see why people keep on tryihg to refute something that’s obviously happening. OK, AL ore is a complete asshole but that doesnt make Global Warming any less real.
    I can understand people are scared they will have to be told to curb their sweet
    lifestyle and do with less but hey, people have been indulging in nice lifestyle for a while now. It’s time to pay up.

  14. emsnews

    El Nino leads to warmer winters here. It has been incredibly cold.

  15. zip

    did someone read this book? and any comments?

    http://findarticles.com/p/articles/mi_m1093/is_6_45/ai_95629327/
    Minsky, Hyman P 1986. Stabilizing an Unstable Economy. New Haven: Yale University Press

  16. nah

    http://www.nytimes.com/2009/12/28/world/middleeast/28iran.html
    The protests, on the holiday commemorating the death of Hussein, Shiite Islam’s holiest martyr, were the bloodiest and among the largest since the uprisings that followed Iran’s disputed presidential election last June, witnesses said. Hundreds of people were reported wounded, and the Tehran police said they had made 300 arrests.
    .
    absolutely amazing… how does this not cement a fulcrum for power in iran… this ayatollah of silence better speak for his better conchience cuz you cant rule the people without the ‘people’
    .
    i predict a shah moment in 2010… imean people go out knowing there gunna get clubbed…. and when everyone ‘gets’ a suppressive government, that just has to be something to behold…. revolution becomes every day

  17. billibaldi

    Nah, thank you for your link. I do need to point out that Anglo-American alphabet agencies are involved. The NYT article was posted from Beirut not from Iran itself. This is equivalent to me reading an article on the Toasted Tes*** Terrorist being posted in Bogota, Columbia. Our news in Australia is coming from the BBC and the BBC is quoting sources from the internet.

    There may be more going on in violence terms in Jacksonville and Houston than in the whole of Iran.

    I am not saying that there is nothing going on but I would say “Please apply the bull dust filter when reading any account of what is going on in Iran.”

  18. DM

    And starting on the 24 and continuing through 27 December we again had abnormally high temperatures, and the snow ALL melted and is gone now.
    So Global Warming IS real for me. I dont have to make shit up to lie; I been experiencing it for a while now.
    I dont see why people keep on tryihg to refute something that’s obviously happening. OK, AL ore is a complete asshole but that doesnt make Global Warming any less real.

    This is about one of the stupidest comments I have read on this blog.

    I don’t know how old you are Plamen Petkov, but I remember growing up in a time when the pet topic for old men and old ladies was ‘how the weather is changing’.

    Wow! Your snow melted, and you have statistics from December 24 to December 27th to back you up.

    Trying to disillusion a Global Warmingist it like trying to convince the Jehovah’s Witness at your doorstep that god does not really exist.

  19. Actually the sun’s heat contribution is well quantified. You would not be able to make such comments in the presence of knowledgeable people.

  20. emsnews

    Ziff, I hate to tell you this, but do read my ‘Cult’ posting I just put up. No one really likes it when I discuss belief systems and cults and how they exploit REAL fears. That is, SO WHAT if the planet is warming up!!!!

    The cult that has you in its grip doesn’t give ONE FIG about this! They DON’T CARE AT ALL. They want you to cooperate with them so they can fleece all of us.

    Period. Wake up! Note how virtually none of these cultists are changing their own personal lives to fit their Apocalyptic beliefs.

  21. DM

    Reminds me of William Blake’s ‘answer to the parson’

    Why of the sheep do you not learn peace?
    Because I don’t want you to shear my fleece.

  22. DM

    Exactly billibaldi. The ABC (Australian) has been wall-to-wall gleeful BBC reports on Iran. There has even been less air-time for the endless BBC tirades on China’s failure to commemorate the 20th anniversary of Tiananmen Square.

    I am sure though, that even now, the US government is making preparations for the commemoration of the 40th anniversary of the Kent State Massacre.

  23. Yes the cult of climate scientists, just like those 9/11 nutbars, contrail worriers, anti vaccinationists, fox ‘news’. They even have weird initiations, like passing horrible math exams, submittings papers for peer review, publishing and teaching.
    i agree the plan is a con to do nothing , but something could be done to ameliorate a problem that will add to all the other problems. But you are right to point out that its not the end of the world, just some worlds.
    What annoys me about ‘deniers’ is that they are the same anti science crew as creationists , republicans , ignorant rabble.

  24. emsnews

    I am neither a ‘denier’ nor a ‘believer’—-I am merely rational. A true scientist would never say, ‘The world will END’ but rather, ‘The world would CHANGE.’ And then a true scientist would be very curious about this change! A true scientist would know that change is inevitable, and also perhaps, even good.

    Yes, good! Global warming would force humans to change, of course. But we evolved into ‘smart’ apes due to figuring out how to change as the earth changed! The fear that we can’t change is just utterly at odds with the reality that we are able to change ourselves.

    Also, I will note here that way back in 1972, when I was working very hard to spread birth control, we ACCURATELY predicted that too many humans would unbalance nature and change the climate and many other things.

    We were RIGHT back then! And the Chinese listened carefully to us and imposed the one child policy which caused the West to attack China for being too draconian! Talk about insane.

    The anti-birth control movement of all the major death cult religions is leading very directly to the destruction of nature and our planet’s biosystems. Yet, did this very important thing even get mentioned at Copenhagen?

    Nope. Instead, it was all about taxing us in the North for trying to stay alive in the cold.

  25. emsnews

    For example, did the Copenhagen meeting denounce the Pope? Or demand Saudi Arabia rescind laws that condemn women to death if they use birth controls? Yes, it is totally illegal in Saudi Arabia. Did the Copenhagen meeting demand that 10% of the funds from the carbon trading slush fund be used to bring down the birthrate of all the southern, balmy weather parts of the planet, especially Africa, South America and the Middle East?

    Nope. The scientists have been pretty effectively muzzled by the religious fanatics and cultists. And so, their message has become queer and twisted rather than honest and real. For this is the harsh part: when science meets politics, the scientists must be utterly and bravely honest. And this means, denouncing wild reproduction in warmer climates. Northern climates populations are not reproducing like crazy.

  26. OK, the world will change [because we have to drive huge vehicles], and be less habitable for humans.

    You have found an original view on this subject which i admire.

  27. PLovering

    @RobG, “China wrecked the talks, intentionally humiliated Barack Obama”

    How can China wreck a wreck?

    Copenhagen was all smoke and mirrors. The Lizards simply ran out of CO2.

    Hard to blame China for Obama humiliation. Obama never leaves home without it.

  28. Steve

    Birth rates fall naturally as countries industrialize. That’s what I was told in demography 101. http://en.wikipedia.org/wiki/Demographic_transition The mechanism isn’t well understood, but the rich tend to have fewer children. (I’ve got a few pet theories of my own from having sat around in grad student bars and watched the come-ons of highly educated men.)

    I don’t agree that the problem is too many people. We’ve barely begun to scratch the surface of developing alternatives to fossil fuel. We’ve barely put any effort into designing well-insullated houses. Cheap oil has kept it from being a priority in our free-market, why-plan-anything economy. Cheap oil will not last forever. It would be smart to focus on alternative energy sources now, rather than drive into a wall at full speed. But every economics textbook proclaims that government ‘interference’ in the economy is evil. We should run out of oil first, then let the market figure out alternatives after most of the population has died from food shortages, wars, cold, and things like that.

  29. emsnews

    The birth rate is the #1 cause of nearly all environmental problems. A dogged refusal to understand this obvious truth shows that even the believers in global warming are not even slightly serious about really changing the important things that cause ALL environmental degradations.

    That is, we are large, not small, creatures. We are not germs nor are we rats or mice or other small creatures. Once, about 20 million years ago, we were small aboreal mammals but now we are over 150 lbs and often, much over that. The number of major mammals that are bigger than us is not all that great…except for our domesticated mammals like cows.

    Multibillions of big biomass animals roaming the planet, consuming not just food but also the mineral resources, is a HUGE problem. Very huge.

    And isn’t even being addressed, much less, fixed. Anyone in hysterics about humanity dying off due to any environmental problems, should deal with the harsh reality that all biological systems that try to go to infinity CRASH and nearly vanish or do vanish, totally.

    So if we are doing long-range predictions, I predict that we will probably be extinct long before the planet heats up due to WWIII and overpopulation problems.

  30. Steve

    I don’t understand. You talk about “the birth rate,” but you’re aware that it varies drastically from country to country. Rich countries typically have low birth rates, even below replacement levels. We need immigration just to maintain a constant population.

    The consumption of resources varies drastically from country to country as well. China generates less CO2 than the US, though its population is four times as large. Much of the CO2 China does generate is because of export industries for an American market, as you know.

    So I think lifestyle is a much bigger issue than numerical population. The planet can sustain a lot of people living in a sustainable way.

  31. “So I think lifestyle is a much bigger issue than numerical population. The planet can sustain a lot of people living in a sustainable way”
    -Steve

    This is really the crux of the whole issue. It’s the WEST that produces most of the pollutants not the global south where birthrates are the highest. The US comprises 5% of the world’s population yet consumes over 30% of its resources so it always raises a red flag in my mind when westerners complain about birthrates in the so-called developing world. The birthrates of the global south are on par with what they have been for centuries yet, though birthrates have declined in the global north, our CO2 production has steadily increased. The populations of Sub-Saharan Africa, Latin America, or the Arab lands are simply not where the problem rests. It rests with the major PRODUCERS of increased CO2 emissions therefore WE must adapt and change our behavior.

    Yes, this will be painful and our currently unsustainable system faces a radical overhaul but I don’t see it happening because we’re too invested in this fairy tale. In any event whether we adapt to reality or continue to roll along the same path Mother Nature is completely indifferent and will have the final say regardless.

  32. emsnews

    The birthrates of the planet were very high due to high death rates from diseases. Half of all children died before adulthood. Thanks to vaccinations (YES, this saved many lives!) most children survive even in poor countries with very bad sanitation and food.

    Populating the planet like crazy until we are all reduced to starving to death while living in little huts (and thus, resorting to cannibalism) is insane. I don’t see anyone voluntarily going down that road.

    The birthrate in Saudi Arabia is extremely high due to vaccinations, modern medicine and draconian laws preventing women from getting birth controls. And this is making the vast public which doubles in size every 8 years, poorer and poorer and even is destroying the royal family which has a zillion children each decade.

    Bin Laden had many brothers for his father had several wives. Note how he turned out.

  33. Came clueless, left worried. Thanks for the post. – The talent for being happy is appreciating and liking what you have, instead of what you don’t have. – Woody Allen Born 1935

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