November word cloud

already billion birds christmas corporations credit family food going life live money party people per population quarter read really simple thanksgiving things today world year

created at TagCrowd.com

I had a pretty grumpy November if my posts for the month are any indication. This happens every year when the days get short and the weather nasty. This year, I've had time to write and thus share my dark thoughts, whereas in years past I suffered through them mostly alone. Some of my readers have indicated that they don't really appreciate my generosity. Now that we're within spitting distance of the solstice and my brain chemistry finally feels like it has adjusted to the darkness, I'll try to rant a little less. Unlesssomethingreallypissesmeoff.

Happy Birthday to my favourite guy!

The original, unexpurgated Debt Rattle intro

Check out The Automatic Earth today. The following piece, (minus the snarky bits) is the intro for the daily Debt Rattle. Yep, written by yours truly.

In Canada, we're already fully recovered from our Thanksgiving festivities. We wisely take a long weekend in early October to gather with family to give thanks. The weather is often very fine and the fall foliage spectacular, allowing us to escape the usual family drama with a lovely walk outdoors. If all goes well we end the weekend with a vague sense of wellbeing (if only because the family has finally gone) and the fixings for some great sandwiches. The day after Canadian Thanksgiving is called Dieting Tuesday.

And so it is that I have no practical experience of Black Friday, the day after American Thanksgiving when door-crasher specials and deep discounts entice Americans into malls to start the Christmas shopping season. Wikipedia tells me that the term Black Friday was originally used by traffic cops and bus drivers in Philadelphia because of the headaches caused by the traffic jams downtown. Only later was it used as a moniker for the day on which retailers became profitable. Neither of these definitions is what jumps to my mind when I hear the term - rather I think of the devastation caused by the mining of minerals and the production of plastic, the poor working conditions of the assemblers, the pollution caused by shipping, the energy consumed in operating the gadgets and the future landfills overflowing with toxins all as a result of the frantic consuming of the world's wealthiest people.

As we enter the sputtering last days of late capitalism, the messages from the powers that be become more and more absurd. Drill! Buy! Bail! These are the panicky cries of the masters of an unravelling economic system based on exponential growth. The Canadian prime minister promised that in an effort to stimulate the economy he will open up uranium resources to foreign companies (presumably to rip it out of the ground faster) and relax environmental regulations for oil exploration and development in the Arctic. Canadians have been hearing this type of nonsense for so long we elected him instead of running him out of town. Corporations fill our mailboxes with advertising porn enticing us to spend spend spend. And generally, as good citizens of capitalist countries, we do. We consume to the limit of our incomes and often a good deal more. We listen to politicians explaining how the only solution is to give our grandchildren's money to bloated half-dead corporations and we mutter but we don't mutiny.

According to the bleating heads, now is a good time to buy a brand new V8 Dodge Charger. Chrysler is offering employee pricing and a major Canadian bank (the soundest banks in the world we're told) will provide 0% financing for 84 months. I'm astonished at the absurdity of this. It makes sense for Chrysler to try to unload these ugly, impractical symbols of excess, and that is where the sense ends. Even if I was a middle aged guy who hasn't achieved closure on some high school trauma and I thought owning one of these powerful gas guzzlers would make me whole, I would surely think twice about dropping my hard earned after-tax dollars on a car made by a near-bankrupt company notorious for producing unreliable vehicles. If I could, through denial or Prozac, get over that hurdle, I could probably also be convinced to avail myself of the opportunity to be indebted to RBC for the next seven years. If I was a loan officer at the bank though, I would automatically deny any applicant for a seven year loan on a Dodge Charger by simple virtue of the fact that to even consider such a thing is indicative of such poor judgment I wouldn't take the risk. Perhaps if I was a loan officer who happens to read TAE from time to time, I might take into consideration that the value of this car might rise from zero to something in year 3 or so of the loan as it is pressed into service as shelter for our unfortunate mid-life crisis and what's left of his family.

We just held a party using our children's cheap fuel, deep topsoil, abundant forests and clean water behaving like crack addicts frantically sampling every white speck, looking for more nature to keep the party going. We let ourselves be abused and lied to by governments and corporations because we didn't want to acknowledge that our way of life couldn't be sustained. And so we find ourselves still in the bar, minutes from closing time. We know the lights will come on and in the greenish glare, even in our impaired state, we'll recognize the ugly truth that we've wasted a lot of time and resources, hurt a lot of people and there's not a chance in hell of spending the rest of the night with someone remotely attractive. And even if we could afford the gas for our new Dodge Charger, we're too drunk to drive it home.

Neoliberal weasels run amok

I usually rant about the state of the world in general without offering too much in the way of specifics. Not today. Today I'm specifically pissed at the prime minister, the minister of finance and whatever weasels they're keeping as advisors. It appears the bunch of them have just passed with flying colours Milton Friedman's Disaster Capitalism 101 course which he teaches by distance education from hell.

The current economic situation has given them the perfect opportunity to practice some of what they've learned. Jim Flaherty outlined the plan today. Firstly he cancelled federal funding for political parties. After all, 90 cents for every citizen of the country is an outrageous sum for an effective opposition. Second, he suspended the right of federal civil servants to strike for two years. That's because one should never pass on an opportunity to take away workers' rights. Pay equity settlements will now have to be negotiated in contract bargaining rather than through the Human Rights Commission to avoid "double pay equity" payments. Jim says we taxpayers have paid too much money to those angry women already. The government is granting an extension to the deadline for corporations to fully fund their pension plans. Those workers can be so annoying with all their bleating for pensions, and this will provide a little relief. The icing on this cake is the plan to sell government assets. This is well timed to ensure that the corporations who buy them spend as little as possible.

Read The Shock Doctrine by Naomi Klein if you haven't done so already to see what's going on here. The government is using the excuse of a financial crisis to kick the legs out from under workers while offering no meaningful assistance to anyone. Publicly owned assets will be practically donated to the private sector. And the party is just beginning.

Forgive me...

There was a lot of advertising porn around the house this weekend and the entire family dove into it with gusto. It seems retailers have cranked up the heat to extract every possible penny from folks, and part of the strategy is sending out colourful flyers with tempting deal after tempting deal. I've had an eye out for a new camera ever since mine died in Norway this summer. I've been using M's perfectly decent camera, but the new ones still call out to me. They have beautiful colours and gazillions of pixels and image stabilization and big screens and they're thin and I need one.

After spending some time with the flyers, I realized I also need a GPS unit. That was a bit of a surprise to me, as I have been in a car with a GPS precisely once. I'm not sure how I missed knowing how much I needed one up til now, but I do. And I need a waffle maker. And an espresso machine and one of those denim work jackets they're selling at Lee Valley Tools. And if I don't get some LED Christmas lights I'll burst.

And seed catalogue season is just around the corner.

Abandon magical thinking, all ye who enter here

Hope has taken a huge shit kicking in my mental space lately. I just finished watching Children of Men, a brutal but not inconceivable look at the near future. This after reading A Short History of Progress by Ronald Wright and watching a talk by Derrick Jensen. Oh, and Joe Bageant's blog does some serious hope bashing, too. And that doesn't include the evening news.

I see my current lack of hope as acceptance, rather than despair. A significant ratcheting down of expectations based on what I see as overwhelming evidence of generalized collapse. Someone (Dan Gardner, if you must know) suggested I should read some optimistic stuff to counterbalance the negative. I couldn't actually find anything credible so I left it at that, but it reminded me that conventional thinking seems to be that the truth lies somewhere in the middle ground, but the location of said reasonable place is entirely dependent on where you put the ends. Just because I'm asking for a million dollar salary, it doesn't mean that 500k is reasonable.

Wishful thinking has been legitimized to the point that people can have serious conversations about the "law" of attraction and otherwise intelligent people look at reams of evidence that points to we're fucked and cling to the hope that some technological solution will cure our problems. We're encouraged to replace our old stuff with new stuff to minimize our impact, but we mustn't say out loud that there are too many people consuming way too much and the whole thing is a house of cards that shouldn't be propped up anyway.

Lest anyone worry about my mental state, I assure you I'm fine. It's a beautiful day, the birds are flitting around the feeder just outside the window, and I brew a fine cup of coffee. I'm warm and safe and so is my family, and that's good enough. No delusions required.

This might pinch a little

Anyone who has read more than a few of my blog posts knows that I have a tendency to rant about over-consumption and the end of the world as we know it. I've just had my thermostat-lowering, paper-recycling, organic world view shaken up, once again, by Derrick Jensen. He's written a graphic novel with Stephanie McMillan called As the World Burns: 50 Simple Things You Can Do to Stay in Denial. They basically advocate dismantling our entire industrial civilization, using whatever means possible. Last year, I read Endgame Volume 2, which if you make it through, will have you feeling guilty for not blowing up dams. The premise of both of these books is that as humans we have no right to destroy the livelihood of wild creatures for our own financial gain. He doesn't mean we should consume a little less and minimize our impact, he means we should cease and desist destroying the environment.

One thing that comes to mind is that our corporate civilization seems to be collapsing under the weight of its own excess without any help at all from one-eyed terrorist bunnies planting dynamite (read the book). Maybe that's not so bad. One thing's for certain. If you read Derrick Jensen, you'll never look at the status quo the same way again.

What's going on for dummies

Stoneleigh from The Automatic Earth has posted a comment on Garth Turner's blog that sums up our current financial situation in the simplest terms possible. I've quoted the whole thing here so you don't have to search for it. Once you've read this a few times, you'll understand a whole lot more than your financial advisor or real estate agent will tell you.

A 1930s style depression is not impossible by any means. If governments could avoid a depression merely by printing money, then one would never have happened. Unfortunately, depressions do happen, because ‘money printing’ (monetizing debt) doesn’t cause inflation (ie an increase in the effective money supply) during a hurricane of credit destruction. Traditional money supply measures don’t capture the full picture.

Credit functions as a money equivalent during the expansion phase, but loses the quality of ‘moneyness’ once expansion morphs into contraction. As the vast majority of the effective money supply is currently credit, the collapse of credit will crash the money supply. As is already happening, ‘printing’ merely send money into a giant black hole of credit destruction, thanks to the hoarding mentality that has taken hold amongst banks due to the collapse of trust. Banks know what toxic waste they hold in their own vaults, and certainly aren’t going to trust their colleagues who almost certainly hold the same.

Attempts to stimulate interbank lending are failing miserably, because you can’t ‘print’ trust. Once a deleveraging event has begun, it will proceed to its natural conclusion - the point where the (small amount of) remaining debt is acceptably collateralized to the (few) remaining creditors. All governments can do is to make it worse in the meantime.

We are still in the very early stages of the deleveraging process, where toxic ‘assets’ are being shielded from the harsh light of day, so to speak. Eventually, there will be a mark-to-market event, however hard governments and central bankers try to avoid one, and that will precipitate a firesale of assets at pennies on the dollar.

Such an event cannot be avoided, at least partially due to the creation of perverse incentives in the derivatives market. For instance, allowing a third party to take out a credit default swap against a company they do not own is analogous to allowing me to take out fire insurance on your home, thereby giving me an incentive to burn it down for profit. We have yet to see the ‘burning down for profit’ phase, but it is coming, and when it does, the scale of counterparty risk in the CDS market will also be revealed. A large percentage of companies will not be able to collect on winning bets, and will therefore not be able to pay out on losing ones in turn. This will turn into a cascade event in a $62 trillion market, the effect of which will dwarf the credit destruction we’ve seen so far.

This event is truly global - thanks to the tight coupling in global financial markets, contagion inevitably spreads. The use of derivatives intended to mitigate risk has in fact led to systemic risk. There’s a reason why Warren Buffet refers to derivatives as financial weapons of mass destruction.

If you follow the global media, rather than just the blinkered North American version, you will see how many countries are already teetering on the brink as a result of the credit crunch. Check out Iceland, or Pakistan, the Ukraine, Spain, the UK, Ireland, much of eastern Europe and many more. Many of those countries had far worse housing bubbles than the US and have much further to fall as a result. To imagine Canada to be immune from such a conflagration is simply fanciful. Our real estate excesses have been less extreme, but our banking system is vulnerable, and our export economy will take an enormous hit.

Have you noticed the extent to which shipping is collapsing worldwide? Check out the Baltic Dry index for a leading indicator of the effect of the credit crunch on the real economy. The letters of credit that used to be routine are no longer available, so goods do not move. We live in a just-in-time economy and the paralysis of shipping will eventually lead to empty shelves.

This crisis is very much larger than merely real estate. Liquidity, the supply of which ultimately depends on trust, is the lubricant in the economic engine. Without a sufficient supply, that engine will seize up, just as it did in the 1930s. With no means to connect buyers and sellers, people can starve amid plenty, as they did then. In the 1930s both resources and real skills were plentiful, expectations were nowhere near so inflated and we had none of the structural dependencies on cheap energy and credit that we have now. Without cheap energy and cheap credit, our highly complex socioeconomic system cannot function. A long and painful readjustment is not just likely, but inevitable.