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 Wednesday, December 16, 2009
 Posted by Roberto
 4:39 PM   0 comments   

A BATTLE TO REDEFINE HUMANITY

Tell people something they know already and they will thank you for it.
Tell them something new and they will hate you for it.
George Monbiot

George Monbiot (www.monbiot.com) is the author of the best selling books "The Age of Consent: a manifesto for a new world order" and "Captive State: the corporate takeover of Britain". He writes a weekly column for the Guardian newspaper.

It's hard for a species used to ever-expanding frontiers,
but survival depends on accepting we live within limits.
by George Monbiot

This is the moment at which we turn and face ourselves. Here, in the plastic corridors and crowded stalls, among impenetrable texts and withering procedures, humankind decides what it is and what it will become. It chooses whether to continue living as it has done, until it must make a wasteland of its home, or to stop and redefine itself. This is about much more than climate change. This is about us.

The meeting at Copenhagen confronts us with our primal tragedy. We are the universal ape, equipped with the ingenuity and aggression to bring down prey much larger than itself, break into new lands, roar its defiance of natural constraints. Now we find ourselves hedged in by the consequences of our nature, living meekly on this crowded planet for fear of provoking or damaging others. We have the hearts of lions and live the lives of clerks.

The summit's premise is that the age of heroism is over. We have entered the age of accommodation. No longer may we live without restraint. No longer may we swing our fists regardless of whose nose might be in the way. In everything we do we must now be mindful of the lives of others, cautious, constrained, meticulous. We may no longer live in the moment, as if there were no tomorrow.

This is a meeting about chemicals: the greenhouse gases insulating the atmosphere. But it is also a battle between two world views. The angry men who seek to derail this agreement, and all such limits on their self-fulfilment, have understood this better than we have. A new movement, most visible in North America and Australia, but now apparent everywhere, demands to trample on the lives of others as if this were a human right. It will not be constrained by taxes, gun laws, regulations, health and safety, especially by environmental restraints. It knows that fossil fuels have granted the universal ape amplification beyond its Palaeolithic dreams. For a moment, a marvellous, frontier moment, they allowed us to live in blissful mindlessness.

The angry men know that this golden age has gone; but they cannot find the words for the constraints they hate. Clutching their copies of Atlas Shrugged, they flail around, accusing those who would impede them of communism, fascism, religiosity, misanthropy, but knowing at heart that these restrictions are driven by something far more repulsive to the unrestrained man: the decencies we owe to other human beings.

I fear this chorus of bullies, but I also sympathise. I lead a mostly peaceful life, but my dreams are haunted by giant aurochs. All those of us whose blood still races are forced to sublimate, to fantasise. In daydreams and video games we find the lives that ecological limits and other people's interests forbid us to live.

Humanity is no longer split between conservatives and liberals, reactionaries and progressives, though both sides are informed by the older politics. Today the battle lines are drawn between expanders and restrainers; those who believe that there should be no impediments and those who believe that we must live within limits. The vicious battles we have seen so far between greens and climate change deniers, road safety campaigners and speed freaks, real grassroots groups and corporate-sponsored astroturfers are just the beginning. This war will become much uglier as people kick against the limits that decency demands.

So here we are, in the land of Beowulf's heroics, lost in a fog of acronyms and euphemisms, parentheses and exemptions, the deathly diplomacy required to accommodate everyone's demands. There is no space for heroism here; all passion and power breaks against the needs of others. This is how it should be, though every neurone revolts against it.

Although the delegates are waking up to the scale of their responsibility, I still believe they will sell us out. Everyone wants his last adventure. Hardly anyone among the official parties can accept the implications of living within our means, of living with tomorrow in mind. There will, they tell themselves, always be another frontier, another means to escape our constraints, to dump our dissatisfactions on other places and other people. Hanging over everything discussed here is the theme that dare not speak its name, always present but never mentioned. Economic growth is the magic formula which allows our conflicts to remain unresolved.

While economies grow, social justice is unnecessary, as lives can be improved without redistribution. While economies grow, people need not confront their elites. While economies grow, we can keep buying our way out of trouble. But, like the bankers, we stave off trouble today only by multiplying it tomorrow. Through economic growth we are borrowing time at punitive rates of interest. It ensures that any cuts agreed at Copenhagen will eventually be outstripped. Even if we manage to prevent climate breakdown, growth means that it's only a matter of time before we hit a new constraint, which demands a new global response: oil, water, phosphate, soil. We will lurch from crisis to existential crisis unless we address the underlying cause: perpetual growth cannot be accommodated on a finite planet.

For all their earnest self-restraint, the negotiators in the plastic city are still not serious, even about climate change. There's another great unmentionable here: supply. Most of the nation states tussling at Copenhagen have two fossil fuel policies. One is to minimise demand, by encouraging us to reduce our consumption. The other is to maximise supply, by encouraging companies to extract as much from the ground as they can.

We know, from the papers published in Nature in April, that we can use a maximum of 60% of current reserves of coal, oil and gas if the average global temperature is not to rise by more than two degrees. We can burn much less if, as many poorer countries now insist, we seek to prevent the temperature from rising by more than 1.5C. We know that capture and storage will dispose of just a small fraction of the carbon in these fuels. There are two obvious conclusions: governments must decide which existing reserves of fossil fuel are to be left in the ground, and they must introduce a global moratorium on prospecting for new reserves. Neither of these proposals has even been mooted for discussion.

But somehow this first great global battle between expanders and restrainers must be won and then the battles that lie beyond it ? rising consumption, corporate power, economic growth ? must begin. If governments don't show some resolve on climate change, the expanders will seize on the restrainers' weakness. They will attack ? using the same tactics of denial, obfuscation and appeals to self-interest ? the other measures that protect people from each other, or which prevent the world's ecosystems from being destroyed. There is no end to this fight, no line these people will not cross. They too are aware that this a battle to redefine humanity, and they wish to redefine it as a species even more rapacious than it is today.

 

 Monday, September 14, 2009
 Posted by Roberto
 5:21 PM   0 comments   

TEN BUBBLES IN THE MAKING



The Business Insider, Sept. 14, 2009:
One year after America's brush with economic catastrophe, there's plenty of looking back at the bubbles that caused financial chaos.

But what's next?
There are surely dangerous economic bubbles forming as we speak. As Alan Greenspan warned this week, "They [financial crises] are all different, but they have one fundamental source," he said. "That is the unquenchable capability of human beings when confronted with long periods of prosperity to presume that it will continue."

The trick, of course, is spotting them. By definition, most people don't spot a bubble before they form and burst.

Here's 10 for which you should be on alert:

1. China bubble: Despite the weak global economy, the Chinese stock market has soared like crazy this year. But many believe the rally has been driven purely by government-supplied liquidity, rather than fundamentals. The fear is that companies are flush with cash, but have little "real" to do with the cash, so they're parking it in the stock market casino. The Chinese real estate market appears to be on a similar trajectory.

2. Green bubble: Green has been everywhere. With observers saying the "Age of Cleantech and Biotech" will be the next major economic revolution, and Washington pouring billions of dollars into alternative energy projects, you'd think a bubble would have already formed. But, as we noted this spring, it did not, at least from an investment perspective.

Still, as the economic recovery takes shape, alternative energy could see excess investment on hopes of big future returns. There's plenty of hype left, and if investors regain the cash to get in the game, could green become the next internet or housing bubble?

3. Gold bubble: Gold prices just keep going up. They've risen for seven straight years, recently breaking $1,000 per ounce.

Is it a bubble? Right now, it doesn't look too bad. Gold is good in both inflationary and deflationary periods, as it holds wealth tangibly. And, as the Telegraph notes, there's real demand, especially from China.

But with some predicting a doubling of prices to $2,000 an ounce, too many people could jump in and spike the real value of the precious metal. The "rise forever" mentality usually means trouble.

4. Federal Reserve bubble: Is the Fed saving the financial system or creating another dangerous credit bubble by snapping up mortgage-backed securities?

At first glance, the Fed's effort to clean up mortgage-backed securities is a winner. But, as Heidi Moore wrote for Slate's The Big Money, the Fed is actually creating a bubble similar to the one it's trying to do damage control on. By eagerly trying to save banks and stabilize the housing market, Washington is taking on too much: $1.25 trillion of mortgaged-backed securities, including both the original toxic assets and products of foreclosures to come. So who would bail the Fed out? You.

5. Trash stock bubble: There's a rush to trash going on. Stocks like Fannie Mae (FNM), Freddie Mac (FRE), AIG (AIG) and even GM made big runs in August -- trading in trash financials made up nearly one-third of NYSE's August volume.

So why are people buying junk? Charlie Gasparino says shares of junk financials -- companies like Fannie, Freddie, AIG, Citi and Bank of America -- are being pushed up by a short squeeze. The Wall Street Journal suspects its high frequency traders. And others say its retail speculation and day traders getting their way while Wall Street went on vacation.

6. Education bubble: More people are going back to college and taking on huge debt to do it, despite questions about what the degree is really worth.

Last year, the amount borrowed by students and received by schools grew some 25% over the previous year, to $75.1 billion. That's a huge amount, especially with weak, low-paying job prospects for graduates in this economy.

As we've noted, all this student loan debt is crazy. Despite the desire to see more subsidization of college, we suspect there will be a collapse in student loan debt availability and desire to take on new debt.

Short of telling kids not to go to college, something's going to give.

The pop may be starting already. As Bloomberg reports, as many as one-third of all private colleges surveyed said they expected enrollment to drop in the next academic year. And almost 40 percent of those colleges said some of their students dropped out due to personal economic reasons and a quarter said full-time attendees switched to part time. Half said families had to cut back their expected contributions as the value of college savings plans dropped 21 percent last year.

7. Subprime bubble, 2.0: What are banks doing with all those subprime mortgages? They're repackaging with a higher rating -- "re-securitization of real estate mortgage investment conduits" -- and selling them.

As we've noted, it's a plan nearly identical to the complicated investment packages of the financial crisis a year ago. That being said, the problem was not strictly securitization, but the underlying housing bubble. So the return of complicated products isn't necessarily the end of the world.

8. Life insurance securitization bubble: In its search for new profits, Wall Street is planning on securitizing "life settlements" -- policies that the sick and elderly can sell for cash while they're alive -- much like it did subprime mortgages. The New York Times warns that we could be looking at subprime all over again.

Maybe. As we've noted, it wasn't securitization that caused the financial meltdown. It was the bursting of the housing bubble. Yes, there was a feedback loop, whereby securitization allowed more money to flow towards housing, but it seems unlikely that "life settlements" would get big enough to infect all portions of the financial world.

9. Commercial real estate bubble: This bubble is already hissing, if not popping outright.

While the economy is improving and some home sales are slowly coming back, the commercial real estate market could get far worse.

As The New York Times reports, "Even though industry lobbyists were able to persuade Congress to extend a loan program aimed at prodding the stalled securitization market back to life, several analysts said it was unlikely to head off a spate of defaults, foreclosures and bankruptcies that could surpass the devastating real estate crash of the early 1990s."

As UPI notes, commercial mortgage defaults could reach 4.1 percent by the end of the year, up from 2.25 percent in the first quarter, and Real Capital Analytics estimates commercial property loans worth $83 billion have been involved in default, foreclosure or bankruptcy in 2009.

Badly hit will likely be malls. "The next financial tsunami to hit will be the widespread failure of shopping center mortgages," says Peter Monroe, co-chair of REOMAC, a not for profit trade association to CNBC. "Half a trillion dollars of commercial loans financed on historically low rates, are due for refinancing in the next three years," says Monroe. "The negative impact of these shopping center mortgages is enormous."

10. Emerging market bubble: It's not just China. Risk-tolerant investors are bidding up emerging market shares to valuations not seen in 9 years. With an average PE of 20x, they're not in bubble territory just yet, but watch for things to get out of hand.



Despite the weak global economy, the Chinese stock market has soared like crazy this year. But many believe the rally has been driven purely by government-supplied liquidity, rather than fundamentals. The fear is that companies are flush with cash, but have little "real" to do with the cash, so they're parking it in the stock market casino. The Chinese real estate market appears to be on a similar trajectory.



"The myth of the rationality-assuming economist"
Human beings chase bubbles. They favor short-term pleasures over long-term ones. Our ancient nervous system clouds our rational decision making. We make decisions based on random recent events, like floods! Or terrorist attacks! Do we assume regulators to be rational? Remember, regulators pre-bubble were interested in expanding homeownership and the general policy of the United States was to keep price-appreciation going. That's been built into our law for awhile. Sure, now we might (for some period) adopt a different stance. But over the long run, on what basis are we to believe that the biases and irrationality of government regulation/policy will prove to be the proper antidote to our own actions? The answer's never given. It's just assumed.

Sources:
The Business Insider
Look, We Get It, People Aren't Always 100% Rational

 

 Thursday, September 10, 2009
 Posted by Roberto
 3:13 PM   0 comments   

BUBBLE DIAGNOSIS AND PREDICTION

Econophysicist Predicts Date of Chinese Stock Market Collapse:



Back in July, econophysicist Didier Sornette at the Swiss Federal Institute of Technology in Zurich and a few pals predicted the impending collapse of the Shanghai Composite stock market index.

Their evidence was that the index had been growing at a faster than exponential rate, which was clearly measurable and obviously unsustainable.

At the beginning of August, the Shanghai Composite dropped by about 20 per cent!

Yesterday, Sornette and co publish the method they use to make their prediction.
Their method is a synthesis of ideas from the economic theory of rational expectation bubbles, from the imitation and herding behaviour of investors and traders and from the mathematical and statistical physics of bifurcations and phase transitions.

From this, they say they have discovered an unambiguous signature of a bubble market about to collapse in the form of super-exponential growth decorated with logarithmic oscillations as in the diagram above.

Sornette says he has used this method to predict the collapse of several bubbles in the last few years, including the collapse of the oil bubble last year and the US housing market in 2006.

That's important work which could have a profound impact on economic models. If Sornette and his colleagues have put their money where there mouths are, they ought to be super rich by now.

One interesting aspect of Sornette's predictions is that the team claim that they will not affect the market in a way that changes the forecast.

"Even in the presence of investors fully informed of the presence of the bubble and with the knowledge of its end date, it remains rational to stay invested in the market to garner very large returns since the risk of a crash remains finite."

Of course, the end of a bubble doesn't always imply a crash, just a change from super exponential growth to some other kind of market dynamics.

But if Sornette's forecasts prove reliable, the herding behaviour of traders and investors makes it seem inevitable that they will trigger crashes. If that happens, they will become self-fulfilling prophecies that will generate some interesting dilemmas for traders and regulators alike.

Sources:
Econophysicist Predicts Date of Chinese Stock Market Collapse
Bubble Diagnosis and Prediction of the Chinese stock market bubbles

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 Tuesday, August 25, 2009
 Posted by Roberto
 2:33 PM   0 comments   

THE PONZI ECONOMY

PREPARING FOR THE WORST, BY ROBERT KIYOSAKI

"Is the crisis over?" is a question I am often asked. "Is the economy coming back?"
My reply is, "I don't think so. I would prepare for the worst."

Like most people, I wish for a better future for all of us. Life is better when people are working, happy, and spending money.

The stock market has been going up since March 9, 2009. Talk of "green shoots" fill the air. Yet, in spite of the more positive news, I continue to recommend that people prepare for the worst. The following are some of my reasons:

1. I believe the stock market is being manipulated. I suspect the government, banks, and Wall Street are doing everything they can to keep the market from crashing. Our leaders know that nothing makes the world feel better than a raging bull market.

Do I have any proof that the market is being manipulated? No. I just smell a rat, or a pack of rats. I believe greed, self-interest, arrogance, and fear control the financial markets. I suspect those in charge will do anything to keep us all from panicking... and I don't blame them. A global panic would be ugly and dangerous.

2. In my view, this global crisis has been caused by the Federal Reserve Bank, the U.S. Treasury, Wall Street, and the central banks of the world. They caused the problem, profited excessively in doing so, and now profit by being asked to fix the problem.

Every time I hear a politician mention the word stimulus, my mind flashes back to high school biology class, when I touched battery wires to a dead frog to make it twitch. Today, you and I are the dead frogs. Pretty soon the dead frog will be fried frog.

In the 1980s, our government's hot money stimulus was measured only in the millions of dollars. By the 1990s, the government had to ramp the stimulus voltage into the billions in order to get the frog to twitch. Today the frog has jumper cables with trillions in high-voltage hot money pouring through the lines.

While most us feel better when we have more high-voltage money in our hands, none of us feel good about higher taxes, increasing national debt, and rising inflation for the long term. Another old saying goes, "Sometimes the cure is worse than the disease." I say the government stimulus cure is killing us frogs.

3. Old frogs don't hop. Another reason I am cautious about the future is that the Western world has a growing number of old frogs. Between 1970 and 2000, the economy responded to bailouts and stimulus packages because the baby boomers of the world were entering their greatest earning years -- their purchasing power increased, and demand for homes, cars, refrigerators, computers, and TVs boosted the economy.

The stimulus plans seemed to work. But when a person turns 60, their spending habits change dramatically. They stop consuming and start conserving like a bear preparing for winter. The economy of the Western world is heading into winter. Hot wires and hot money will not get old frogs to hop. Old frogs will simply join the bears and stick that money in the bank as they prepare for the long, hard winter known as old age. The businesses that will do well in a winter economy are drug companies, hospitals, wheelchair manufacturers, and mortuaries.

4. The dying frog economy will lead us to the biggest Ponzi schemes of all: Social Security and Medicare. If we think this subprime financial crisis is big, it's my opinion that this crisis will be dwarfed by the crisis brewing in Social Security and Medicare...Medicare being the biggest crisis of all. As old frogs head for the big lily pad in the sky, they will demand young frogs spend even more in tax dollars just to keep old frogs from croaking.

5. The 401(k)Ponzi scheme. A Ponzi scheme, like the scheme Madoff ran, depends upon young money to pay off old money. In other words, a Ponzi scheme needs tadpoles to finance old frogs. The same is true for the 401(k) and other retirement plans to work. If young money does not come into the stock market, the old money cannot retire. One reason so many people my age are worried, not only about Social Security and Medicare, is because they're concerned about getting their money out of the stock market before the other old frogs decide to drain the swamp.

The facts are that the 401(k) plan has a trigger that requires old frogs to begin withdrawing their money at a certain age. In other words, as baby boomers grow older, more and more will be required, by law, to begin withdrawing their money from the market. You do not have to be a rocket scientist to know that it is hard for a market to keep going up when more and more people are getting out.

The reason the 401(k) has this law related to mandatory withdrawals is because the Federal government wants to collect the taxes that they deferred when the worker's money went into the plan. In other words, the taxman wants their pound of flesh. Since they allowed the worker to invest without paying taxes, the government wants their tax dollars when the employee retires. That is why the laws require older workers to sell their shares and pay their pound of flesh.

Demographics show that we are entering a battle between young and old. I call it the "Age War." The young want to hang onto their money to grow their families, businesses, and wealth. The old want the tax and investment dollars of the young to sustain their old age.

This war is not coming...it is upon us now. This is one of many reasons why I remain cautious and say, "The worst is yet to come."

Sources:
Preparing for the Worst, by Robert Kiyosaki
Robert Kiyosaki on Wikipedia
Rich Dad


Links:
Money Pirates
Stock Shock: The Movie

Labels:

 

 Monday, August 17, 2009
 Posted by Roberto
 3:41 PM   1 comments   

WIKITUDE WORLD BROWSER



WIKITUDE World Browser presents the user with data about their surroundings, nearby landmarks, and other points of interest by overlaying information on the real-time camera view of a smartphone.

Geo-Tag the World:
Wikitude.me, is the Augmented Reality (AR) platform which allows you to browse the world and helps you discover information about places and points of interest around you.

WIKITUDE World Browser

This is what we had to wear in order to have augmented reality back in 2001 (in the picture my friend Tom Brooks):



And this is how SixthSense, enhances the real world with digital information at MIT today:



A simple, wearable device enhances the real world with digital information
SixthSense Video

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 Monday, August 03, 2009
 Posted by Roberto
 6:07 PM   0 comments   

STOCK MARKETS RALLY, TOO FAR, TOO FAST?



U.S. MARKETS

PREMISE:
March 18, 2009: The Committee decided today to increase the size of the Federal Reserve's balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.

STATUS:
If the market would trade on fundamentals, maybe the march lows would have been lower, and maybe we would end-up retesting those lows, but in a money printing world (Asset prices tend to rise when the government prints money), we kind of throw some of the historical evaluation tools out of the window and we witness everyone being bullish in the U.S. after a 40 percent rise in the S&P.


CHINA

PREMISE:
July 8, 2009: In China the focus of the stimulus was to stimulate lending. China's new lending more than doubled in June from a month earlier, increasing concerns for bad loans and asset bubbles. New lending was 1.53 trillion yuan ($224 billion), the central bank said on its Web site today, bringing total lending this year to 7.4 trillion yuan ($1080 billion).

STATUS:
The Shanghai Composite is up 87 percent this year!
The government is countering an export collapse by flooding the economy with money to fuel domestic demand. Rapid credit growth poses a risk to the nation's lenders and a concentration of credit in some industries and businesses may damage the stability of the financial system, the banking regulator said yesterday.

"Excess liquidity is fueling speculation and that means asset bubbles and wasteful investment," said Isaac Meng, a senior economist at BNP Paribas SA in Beijing.

Fear the Dark Side of China's Lending Surge
RMB 1.5 trillion in new Chinese lending, can we turn this thing off?


DANGER:
If China starts falling, the U.S. market can follow...

 


 Posted by Roberto
 4:19 PM   0 comments   

GLOBAL INNOVATION IS OUR ONLY HOPE

July 2009 | NASA Ames Research Center
Interviews at the Singularity University



Larry Smarr, director of the California Institute for Telecommunications and Information Technology, interviewed by David Orban at the Singularity University.

 

 Wednesday, July 08, 2009
 Posted by Roberto
 6:22 PM   0 comments   

ARTIFACTS FROM THE FUTURE

Our understanding of the future is greatly improved when we have clear images of what it might be like. Here are some images:










For years, Wired magazine has tapped a bevy of designers and artists in the tech field to craft detailed visions of futuristic objects for a monthly showcase at the close of each issue.

11.04 - Election Day (2012)
12.04 - Barf Bag (2047)
01.05 - House Call (near future)
02.05 - Taste Tester (2009)
03.05 - Insurance Form (2069)
04.05 - Horoscope (2056)
05.05 - Bumper Sticker (2012)
06.05 - Antivirus (2022)
07.05 - Nightstand (2017)
08.05 - Crossword (2019) [solution]
09.05 - Space Elevator (2032)
10.05 - Sharper Image (2012)
11.05 - Diaper (2024)
12.05 - Christmas Morning (2016)
01.06 - Mood Ring (2009)
02.06 - Love Tester (2015)
03.06 - MTA Route Map (2067)
04.06 - Tax Day (2021)
05.06 - Operation (2027)
06.06 - Bookstore (2021) [side view]
07.06 - Contact Lens (2020)
08.06 - Diet Cola (2019)
09.06 - Report Card (2018)
10.06 - Bluetooth (2019)
11.06 - Organ Farming (2015)
12.06 - Christmas Shopping (2017)
01.07 - Crayons (2013)
02.07 - Speeding Ticket (2054)
03.07 - Medicine Cabinet (2013)
04.07 - Bug Spray (ca. 2050)
05.07 - Reunion (2052)
06.07 - Fido Fusion (2016)
07.07 - Comic Book (2021)
08.07 - Fruit Stand (ca. 2020)
09.07 - Birthday (2079)
10.07 - Halloween (2015)
11.07 - Waste Management (ca. 2025)
12.07 - Responsibeer (2012)
01.08 - Windshield (2013)
02.08 - Tatoo (near future)
03.08 - Home Shopping (ca. 2016)
04.08 - Risk (2027)
05.08 - Smithsonian (2096)
06.08 - Wine Spectrometer (ca. 2020)
07.08 - "The Final Found" (2018)

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