The Coming Nationalization of the Big Banks

February 9, 2009

Interesting commentary at Jesse’s Cafe Americain this morning regarding when (not if) the major US banks will be nationalized.   While not naming names, the author indicates that the major problem is with the big banks (Citibank, Bank of America, Chase, etc.), and until those banks are truly inspected and cleaned out, we will continue throwing bad money after worse money.

The big banks will, of course, claim this will lead to economic armageddon, and it ,may do so for them personally I suppose.   Much like an overgrown forest, though, you need a big fire once in a while to clear out the dead wood and create the opportunities for new growth to take root.     Won’t be pretty or fun, but it is necessary.


Another Reason to Plant a Garden This Year

January 26, 2009

Consumers may pay more for spring lettuce and summer melons in grocery stores across the country now that California farmers have started abandoning their fields in response to a crippling drought.

link

This reminds me of Kunstler’s rant about the ‘3,000-mile salad.’   We rely on areas like California’s Central Valley for fruits & vegetables more than most Americans realize.  Economies of scale are great when they work in our favor, but the flip side is that when these huge farms fail to deliver the crops we expect from them, we have few other options to explore.

This is also starting to bring water resource conflicts to the front of the news as well:

With such a grim outlook, many California farmers including Giacone are investing millions to drill down hundreds of feet in search of new water sources.

Depending on how much it rains this winter, federal water supplies could be slashed down to nothing this year, forcing farmers to rely solely on brackish well water. But the U.S. Bureau of Reclamation won’t make an official decision until late February, said Ron Milligan, the agency’s Central Valley operations manager.

Since it isn’t raining, farmers that are trying to stay in business are drilling further and further down to find & drain underground reservoirs.   For those that may not know, the term ‘brackish’ indicates that there’s more salt in the water than in normal freshwater, which means that in order to survive, the farmers are increasing the salinity in their fields by irrigating from this source… extracting perhaps more yields over the next few years but drastically reducing the long-term fertility of the fields.

It’s been a cold winter here, but one of the things I’m thankful for is that I live in a state with abundant fresh water… assuming we can stop polluting it.


Hail to the Chief

January 20, 2009

It’s been a busy January for me, so I apologize for the lack of posts.

Today is a momentous day in America.  We inaugurate a new president.  He’s well-spoken, educated, telegenic, has an attractive wife, two cute kids and a mandate for change.   The main differences from past presidents?  The color of his skin and an exotic name.

If nothing else, Obama’s installation as president should give hope to every child that they can achieve pretty much anything they want to if they are willing to work hard enough to get it.

I approach today’s transfer of power as a good thing and as a historic event, but without the sense of jubilation that many in this country have.   I’m very glad to see Bush gone.  From the standpoint of the average American citizen, his policies have ranged from mediocre to terrible.  The best thing one can say about his administration is that there was not another terrorist attack on US soil after 9/11.  How much of that is due to his policies is a matter open for debate.  With Obama as president, it will be hard for him to not improve foreign relations with most of the rest of the world.

My main worry with the incoming Obama team deals with the economy.  We’re still in serious trouble here, and I don’t think continuing to shovel debt at the problem will work.   That is the approach being forwarded by the Obama economic team, though.   We may see a short-term economic bounce, but over the longer haul I don’t think it will have lasting effect.   The measure of the man will be in how fast Obama recognizes this and changes policy because of it.  If he follows the Bush/Paulson plan of just continuing to throw bad money after worse money, then I will be sorely disappointed.    I voted for Obama because under all of the ‘change’ claptrap he seemed to be thoughtful, intelligent, and pragmatic.  If he cannot break out of the Keynesian economic approach if that fails to work, then we’re all in for a turbulent ride.

I fear that the historic impact of Obama’s election may be swept away by both current events and extremely elevated expectations for his administration.  Some folks are simply happy to have a new face in the White House while others seem to be expecting that we’re all going to have  our money problems magically go away and we’ll get a free pony to boot.  We have dug ourselves into a deep hole, and getting out will be long, hard and messy.

Those are worries for another day, though.  For today, I’m content that the old regime is being swept out and we have a chance to move forward in many areas.  Enjoy the day.


Happy New Year

December 31, 2008

The kids are in bed, guests are gone, and I’m sitting here sipping some bourbon and surfing.   I’ve reached the age where new slippers and booze make for a good Christmas haul, and I’m enjoying both right now.  My progress towards being a grumpy old man continues…

Odds are good I won’t make it to midnight, so happy 2009 everyone.   There will be plenty to write about, think about, prepare for, and live through this year… and not all of it will be bad.   In crisis there is always opportunity, and I hope many of you find those opportunities where you can.


CNN: Stocks will rise in 2009

December 31, 2008

This message brought to you by the good people at Goldman Sachs & JP Morgan, who thank you for your business and are busy shorting the phone book right now.

This strikes me more as wishful thinking than clear analysis.   The assumption is that the Obama stimuli will work and we’ll be back to business as usual.   I for one don’t see that happening over the long term.


Looking at 2009

December 30, 2008

Time again for another predictions post looking at what I see ahead for the new year that’s approaching rapidly.   I do these posts more for my own amusement rather than to engage in any serious attempt at prognostication.    For a more in-depth listing of doomer-ific predictions, please check out Kunstler’s latest post.  Lots of good stuff in there.

I’m picking up on a number of the same vibes that Kunstler and others are and think that 2009 will indeed bring in change, although it will not necessarily be the type that people voted in favor of when they elected Barack Obama to the presidency.   I’m thinking more along the lines of the old intro tagline for the fourth season of Babylon 5… the year “everything changed.”

Read the rest of this entry »


Holding Back the Dam

December 30, 2008

I’ve added Jesse’s Cafe Americain to the blogroll… another excellent site for in-depth financial commentary that you’d have a hard time finding in the mainstream media.

The latest post is quite good, in which the author describes his increasing belief that there will be a hyperinflation event in the USA at some point.

A choice quote:

That has now changed. The dollar is a Ponzi scheme, the waters of debt are overflowing the dam of artificial support, and only a few countries, two of them somewhat unstable, are holding back the deluge.

If this comes to pass, we may all pay off our credit card bills and mortgages in record time yet still have trouble paying for food.

For a picture of what a hyperinflation might look like, check out these pictures from Zimbabwe covering the last year or so.

If something like this comes to pass, having basic sustainable living skills like gardening, mending clothing, etc. will become more valuable than ever.  As Steve Solomon states in his book, being able to grow one’s own vegetables can be the difference between barely surviving and maintaining good health.   I for one plan to make it a goal to get a few square foot gardens in this spring, and to start learning how to save seeds.


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