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Friday, October 31st, 2008

To Fabius Maximus for being crossposted at RGE Monitor. A snippet:

Causes of this crisis

These financial shocks are byproducts of deeper trends, in my opinion.  The world has begun a process of regime change, as the foundations of the post-WWII geopolitical order decay.  Here are some of the major trends forging a new world.  Each of these has played a role in bringing us to this point; some will play an even bigger role forcing events during the next few years.

(a)  The transition from a bipolar (or unipolar) world to a multi-polar world.

(b)  Entering the transition period to peak oil, as global oil production peaked (not necessarily the peak) in 2005.  Since then biofuels have provided most of the growth in liquid fuel consumption.  Rapid GDP growth (almost 5%) required high prices to match ex ante demand with flattish liquid fuel production.

(c)  The replacement of the US dollar as the reserve currency (by what we do not yet know), after 30 years of foreign borrowing – 30 years of increasing current account deficits.

(d)  The exhaustion from overuse of monetary and fiscal policy.  Persistently too-low interest rates yielding serial investment bubbles.  The long decline to near zero of the marginal elasticity of GDP with respect to debt.

(e)  Structural weakness:  Funding long-term businesses with “hot” (aka liquid) capital, from the disintermediation of household savings.  Money shifted from vehicles where institutions bear the risk (insurance, annuities, CD’s, etc) to direct participation (owning stocks and bonds either directly or through mutual funds).   See this post for an explanation.

(f)  The Thomas Kuhn-type paradigm crisis in Keynesian economics, by which the world economies have been steered for fifty years.  The aggregate debt level of an economy is not a significant variable; attempts to integrate into orthodox theory by radical Keynesians (e.g., Hyman Minsky) were unsuccessful.  Sometime after 2000 we reached and broke though the edge of the “operating envelope” of Keynesian theory.  We ran like Wile E. Coyote off the cliff and beyond – a few exhilarating years – and now we fall.

Read the rest here

From small wars to global economies.


Vimothy is correct – FM informs me that RGE Monitor has covered 45 of his posts, in particular:

Financial crisis – what’s happening? how will this end?

Peak Oil and Energy

New Post up at CTLab Review

Friday, October 31st, 2008

Trying to shake off the dust and attend to my other sites in the next few weeks. Here’s one at CTLab Review:

What is al Qaida’s Post-Bailout Balance Sheet ?

The unprecedented global turmoil in financial markets is a subject that goes beyond the normal scope of CTLab but it raises an interesting question – what is al Qaida’s “balance sheet” in the aftermath of the greatest financial meltdown since 1929? 

Read the rest here.

The Return of 1970’s “Feelings” Liberalism

Thursday, October 30th, 2008

This explains a lot:

Ganz says that his and Wageman’s training system works well for the Obama campaign, because it’s designed to channel the enthusiasm of voters who are emotionally inspired by orators such as Obama. This appeal to the right brain contrasts with most of the recent Democratic political campaigns, which have appealed to voters’ logic by selling concepts and policies.

Obama organizers, and some volunteers, enter the campaign machine through weekend training sessions called “Camp Obama.”

The sessions vary in size from groups of 40 to more than 300, held variously at the campaign’s Chicago headquarters, in rented office spaces, union halls, churches or on college campuses.  In addition to leadership and motivation training, the camp features storytelling sessions, where the volunteers are broken up into small teams organized by congressional district. Each member of these groups is asked to tell personal stories in two minutes, in the same format Obama used in his 2004 speech at the Democratic National Convention.   

“Ultimately, your story should move people to specific action by painting a detailed picture of how things might be different if we act, giving us hope that if we act now we can make real that different future,” explains the training manual.  

Hat tip to Socialmedian.

All that is missing is Alan Alda reading from Robert Bly’s Iron John.

Early Returns

Thursday, October 30th, 2008

Went to vote early yesterday and the polling place was mobbed – so much so, that we gave up on the long lines and just went out to dinner. If this frenzy is indicative, then voter turnout is going to extremely high this year

How about a Nuclear Zeppelin ?

Tuesday, October 28th, 2008

WIRED magazine has a post up about reviving the idea of nuclear powered jetliners:

Bring Back the Nuclear-Powered Plane!

“We need to be looking for a solution to aviation emissions which will allow flying to continue in perpetuity with zero impact on the environment,” Professor Poll tells the paper. “We need a design which is not kerosene-powered, and I think nuclear-powered aeroplanes are the answer beyond 2050. The idea was proved 50 years ago, but I accept it would take about 30 years to persuade the public of the need to fly on them.”

A better ( and safer) idea than putting a nuclear reactor on an airplane  would be a nuclear-powered super zeppelin. The crash risk would be minimal and  such a super-zeppelin would have vast advantages in lift over an airplane and be able to ship large quantities of goods virtually anywhere on earth.  Or it could hover semi-permanetly as a SIGINT platform with capabilities of being an “aircraft carrier in the sky” for UAV’s.

Inventive, aeronautical and physics types feel free to sound off in the comments.

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