Monday, January 30, 2012

Friday, January 27, 2012

Cockburn Opines on Gingrich, and Tin Tin


Sick with disappointment that I missed the Tin-Tin movie showing in Eureka, I had to settle for Obama’s State of the Union and Thursday’s Republican debate in Jacksonville.

I saw Tin Tin--in 3-D--on the third and enjoyed it thoroughly, but my friend, who had chosen the movie and invited me to watch it, found it relentlessly propulsive.

Wednesday, January 25, 2012

Blast From the Past: The Hawaii Observer

Ian Lind has a post about The Hawaii Observer, an investigative magazine from the seventies.

Monday, January 23, 2012

Morris Berman

Before reading this review by Kirkpatrick Sale of his latest book, I have never heard of Morris Berman. But now I think I'll check out his books.

He has a blog, Dark Ages America

Saturday, January 21, 2012

Health After Oil


Welcome to Health after Oil (HAO), a place for news, opinion, research, discussion, networking, planning and action in response to the unprecedented and sweeping challenges peak oil, energy decline, and population pressures poses to human health and the institutions whose purpose it is to protect and promote human health. We invite submissions -original content and links- about energy and health and related fiscal/economic and environmental and ecological issues. We note in particular that: 1) Climate change and peak oil are indivisible threats, both stemming from reliance on fossil fuels; and 2) The fiscal and economic crisis now enveloping world economies are intertwined with population growth, energy decline and resource depletion. Infinite growth cannot continue on a finite planet.

Friday, January 20, 2012

Oil Production Will Decline Shortly After 2015


Olivier Rech, formerly of the International Energy Agency has predicted.

Original post.

Afterwards, in my view, we will have to face a decline of the production of all forms of liquid fuels somewhere between 2015 to 2020. This decline will not necessarily be rapid, however, but it will be a decline, that much seems clear.

Cockburn's Latest

The return of Newt and other things.

Thursday, January 19, 2012

Monday, January 16, 2012

"America's Last Chance"

according to Paul Craig Roberts.

Kunstler on the Situation in Iran

What Gives
By James Howard Kunstler
on January 16, 2012 9:55 AM

The awesome exertions of the global banking system to evade the mandates of reality finally yield in a sickening slippage to epochal unwind. What a bad idea: to try to juke nature itself. In case you weren't paying attention over the weekend - and who really wants to? - the cosmic Brinks truck of free money went over a cliff, and the darn thing will keep free-falling until (at least) the American markets open again on Tuesday.

So, everybody and his uncle over in Europe got a sovereign debt downgrade and now the math changes for all the pretend bail-outs and back-stops that had been so exquisitely rigged through the long, nauseating autumn. Math is an annoying representation of reality, but hard to argue with. Bail-outs and back-stops finally became unaffordable even as poetic constructs.

Thus, we also approach the dreaded inflection point for the credit default swaps. Nobody believes that this Mount Everest of jive bond "insurance" can actually pay out, since the first instance of any attempt will bankrupt everybody. And yet there are the holders of all that paper who will object to, say, an 80 percent haircut on their Greek (and other) bonds. Surely some of them will try to invoke their CDS contracts. What then? Three possibilities that I see: 1) all parties and counter-parties go down the drain faster than you can say Benedict Cumberbatch; 2) all parties declare in unison that CDS were a prank that should now just be ignored, as if the cast of Downton Abbey showed up naked at the dinner table; and 3) every sort of loan on God's Green Earth is instantly re-priced and the entire world turns into a flea market. How will America do with its stock of slightly pre-owned Dunkin' Donuts stores, a million-odd Elvis lunch-boxes, and all those old videos of Friends? Don't you wish you'd invested in some hand tools?

In the background of these grave machinations lurks the tragedy of Iran. Subtract the Islamic maniacs who seized the levers of government there thirty-three years ago, and you'd actually find a perfectly modern society, complete with industries, skyscrapers, highways, TV shows, and people eating nice food in restaurants. One can understand why the last Shah was hated and resented. But here you now have a whole class of despotic maniacs much worse than the Shah ever was and they cannot be gotten rid of. Worse, they are devoted to exacting vengeance on the USA and its kindred western nations.

This may be just a tragic case of collective psychological scripting, but it is tending in the direction of a full-dress play-out. Our government believes that their government is determined to build an atomic bomb. Iran's government says, over and over, "...what an idea...!" The trouble is, our guys don't buy their vaudeville act. They will not be allowed to have a bomb, and that's all there is to it. We are doing everything short of all-out war to prevent it, but let's face it, a lot of these things could be construed as acts of war: Stuxnet attacks... blowing up nuclear scientists in their cars. These things are making already-crazy people even crazier, and more reckless.

If events continue down this path then there will be some action in the Persian Gulf. The oil markets will be thrown into disarray. Iran may sink a US naval vessel or two, but we know about their sunburn missiles and we won't put the whole fleet in harm's way, and before too long we will fuck them up very badly. The Iranians are capable of busting up a lot [of] stuff in their neighborhood even as their air force is vaporized and their electric grid goes down. They could launch missiles into the Saudi Arabian oil terminals, for instance. Surely they will try to rain hell down on Israel. That would be a recipe for turning Teheran into an ashtray and a terrible tragedy for those otherwise normal Iranians who are not religious maniacs who wanted nothing more than to raise their children and once in a while go out for a nice lamb dinner.

I don't see any percentage in China and Russia coming into this rumble, though more than a couple of European nations may want to forget their troubles for a moment and, at least, cheerlead from the sidelines.

The result of all this - if the action doesn't get totally out-of-hand - is sure to be a gigantic step down in worldwide energy consumption, trade, and advanced economic activity. It would make the Great Depression look like a sit-com. The American suburban nexus would fail in a matter of weeks. The USA would have to commence the greatest work-around the world has ever seen. In the event, governments everywhere are liable to fall, even here, with elections postponed. There will be little in the way of real money to repair all the things that are falling apart.

Most amazing of all is how quiet the world scene has been, really, since 2001. The buildup of tensions must be out-of-this world. Something had to give.

Martin Luther King, Jr.

Death in the Amazon

I found this at

Loggers burned Amazon tribe girl alive.

The Amazon rainforest isn't featured as prominently as it was twenty years ago, but the destruction continues.

Friday, January 13, 2012


As I said at Hattie's Web, it's not that Mitt Romney is a Mormon, it's that he's an a$$hole. (It's never a good idea to put your money where your mouth is.)

16 January update: More proof of Mitt's a$$holiness.

"Ron Paul will fight on"

From Alexander Cockburn's latest column.

Now Romney heads down south to a likely victory in South Carolina and probably in Florida. Such triumphs, should they come to pass, will plunge the election industry into profound crisis. At this stage in the game, precisely one week after the presidential year opened with the Iowa caucuses on January 3, no one – except perhaps the candidate himself – wants to have the race locked up. The news business, led by the TV networks, wants cliffhangers. Campaign managers, dirty tricksters, and kindred consultants want volley after volley of campaign ads rolling dollars into their pockets. There are armies of “strategists” to be fed their campaign stipends.

Ron Paul will fight on, and give the campaign season at least the semblance of life. In New Hampshire he won strong support from low-income Republicans and the young. It’s conceivable he could bolt onto the Libertarian third party ticket. It would certainly juice up the political year. High-level Republicans are reportedly threatening Paul that if he does bolt, they’ll make sure that his son Rand is not re-elected Senator in Kentucky in 2016.

Monday, January 09, 2012

Kunstler: This Ripe Moment

This Ripe Moment
By James Howard Kunstler
on January 9, 2012 9:21 AM

The narcolepsy of the long Yuletide draws to a close and the world reawakens to its self-spun web of mutually reinforcing fiascos. Just before the holiday, a sense of futility darkened the European banking landscape as cascading sovereign default looked more and more inevitable. It was halted by a bazooka-caliber currency swap Ponzi that allowed the European Central Bank to pretend it had a $700-billion bag of sugar-plums to hand out to more than 200 banks there. That gambit will only keep up the appearance of normality for a couple of months, until the late winter bond rollover provokes a new crisis stage.

Likewise, in the USA, some pressure-cooked December employment statistics gave the false impression of a brightening jobs picture, but no major news network dared to glance behind the curtain at the short-term holiday hires, the uncounted long-term jobless, the ones who don't show up at the government offices anymore, the ones who stopped getting checks, the legions of the hopeless. A nation that can't call 'bullshit' on its own lies deserves all the suffering that might rain down upon it, and that's exactly where we are heading as things economic morph into things political.

How quaint the current Republican jousting tournament will seem in a few months when real violence rides in on the zephyrs of springtime. Each new primary is like the unloading of a Ringling Brothers clown car. There is an inverse relationship between the seriousness of these times and the laughable personalities vying for a place in history. Are they running for high office or auditioning for the role of Parson Weems in a new Lifetime Network TV mini-series? Are you charmed by their absurd casual clothing? Comforted by their know-nothing jabber about the "game-changer" of shale oil [Links mine--P.Z.] and their sincere doubts about the climate change "story?" Is it morally satisfying to know that one or another of these candidates won't drink a beer? (They'd make good Ayatollahs.) In what sort of Creationist parthenogenetic incubator are such pietistic idiots hatched? What these sanctimonious pricks don't realize they are doing is destroying the very legitimacy of the idea that we're capable of governing ourselves per se.

This is the long-term direction of life in North America, by the way - a breakup into small autonomous governing units. It's just that the current cast of characters brings an aura of low comedy to the process. By the time they're through with Washington, the credibility of Federalism will sound like a knock-knock joke.

As for the other side, the "folks" now occupying the White House and its folkster-in-chief, Mr. Obama - the time has come to abandon them. Their failure is complete with the new national security act that allows for suspension of due process of law. The cheek of Mr. Obama in offering a "signing statement" to the effect that his administration would not enforce the law! - as he signed it! For one thing, Obama tacitly invited his own impeachment by declaring he had no intention of enforcing federal law, since enforcement is the chief duty of his office. If John Boehner were not himself such a fraud, he would have started a motion for impeachment before sundown that day.

Occupy Wall Street will seem like a mere harvest dance when we look back from the uproars later in 2012. Both organized parties have managed to banish the rule of law in America. Both parties need to be driven into the wilderness of history and the rule of law has to be rescued from the oblivion they sent it to. What group of clear-thinking adults can get behind that simple project? What voices will resolve out of the phenomenal noise of gadget America, with its deafening tweets, incessant advertising, instant messaging, idiotic robo-calling, and ever-present flat-screen assault on the senses?

I discern the distant sound of rebellion, a spirit that won't be appeased by bytes of Disney-babble from the pandering snouts of Romney, Santorum, Gingrich, Paul or Obama. They are interested only in keeping a set of suicidal rackets going. All the yammer about "freedom" and "liberty" is hollow when the rule of law is AWOL. This ripe time is the natural moment for a true opposition to rise. A few months from now neither major party will have a credible candidate or a plausible platform of ideas. This will be painfully obvious. What angels and demons will rush into that awful vacuum?

Friday, January 06, 2012

Wednesday, January 04, 2012!/MaxBlumenthal/status/154696228913950720

Santorum's key to victory: a guy w/19 kids named Jim Bob prayed "for months" for him

I'd have written it "a guy named Jim Bob, w/19 kids" because at first glance the reader might think he's the father of nineteen children all named Jim Bob! (Of course, George Foreman has five sons all named George.)

Tuesday, January 03, 2012

Monday, January 02, 2012

Janus Part Two: Kunstler's Forecast for 2012

2012 Forecast: Bang and Whimper
By James Howard Kunstler
on January 2, 2012 7:28 AM

There's a lot to be nervous about, even if you don't subscribe to the undercooked Mayan apocalypse lore moving through the gut of the Internet like a Staphylococcus-infected tamale. The casual observer might say that nothing seemed to give on the world scene in 2011 despite the Fukushima meltdown, the Arab Spring uproars, the train wreck of European finance, the disappearing act at MF Global, and the assorted injuries done to the Kardashian brand by the giant walking dildo Kris Humphries.
I demur. On close examination, the industrial world underwent complete zombification in 2011. Its member states and their institutions are now lurching across the stage of history like so many walking dead. Whole European nations are dead, their citizens squirming around the ruined bones of failed speculative condo projects, housing estates, and luxury hotels like botfly larvae. The USA lies in complete moral ruin despite the exertions of ten thousand evangelical preachers in dusty back-road tilt-up chapels from Texas to Carolina, several new museums of Creation Science, and the shining example of former Senator Rick Santorum. Just look at how we behave, from the cloakrooms of Congress to the piercing parlors of West Hollywood to the 7-Elevens of suburban Maryland: a nation of thieves, racketeers, reality TV sluts, wannabe road warriors, light-fingered gangsta-boyz, and crybabies living in an anomie-drenched decrepitating demolition derby landscape of failure. When everybody is a zombie, whose brains are left to eat? Echo answers.... On to the predictions for 2012 then.
The biggest political shock awaiting us is the massive disruption of the major party nominating conventions next summer, when thousands of angry citizens descend on Tampa and Charlotte demanding a reality test. The parties will attempt to go about their ritual business, ignoring the mischief outside the convention centers, and both parties will make the mistake of siccing the cops on the protestors. The result will be a much bigger mess than the one I personally witnessed on the streets of Chicago, 1968, when the party hacks anointed the grinning sell-out Hubert Humphrey to run against Ole Debbil Nixie. Just before getting tear-gassed on Michigan Avenue that night, I saw some kid hoisting a sign that depicted the nominee with a Hitler mustache over the epithet: Mein Humph! It made my night, despite the subsequent retching in the gutter.
The two major parties are completely bankrupt zombie organizations and this election may be their last stand - if they even survive the conventions. Neither of them can come to grips with the reality-based issues of the day: epochal financial and economic contraction, peak energy (and many other resources), climate change, the absence of the rule of law in banking, and generational grievance - or, perhaps more to the point, the manifestations of these giant trends as presented in unemployment, debt slavery, foreclosure, bankruptcy, homelessness, hunger, and X-million family tragedies. Both parties can only promise the return to a bygone status quo that is largely mythical.
President Obama, the putative "progressive" - spokesman of the Ivy League, Silicon Valley, Lower Manhattan, and all the other precincts where "folks" imagine themselves to be advanced thinkers - can't even wrap his mind around the simple fact that we will never be "energy independent" if we think that means running 260 million cars and trucks, no matter how many algae farms we pretend to invest in. Here is man who ought to know better and either doesn't, or is lying about it. He has other failures to answer for, too. Why, following the Citizens United decision in the Supreme Court, did Mr. Obama not prompt his party to sponsor federal legislation (or a constitutional amendment) that would redefine a corporation as not identical in "personhood" to a human being? Why does he still employ an Attorney General who has not started one prosecution for financial misconduct amid a panorama of arrant swindling and fraud? (Ditto: heads of the SEC, CFTC, etc.) And why did he not object loudly to the provision in the latest defense appropriations bill that allows for the capricious arrests and indefinite detention of anyone in the USA on suspicion of "terrorism?" Does this graduate of Harvard Law remember what habeas corpus means?
A lot of voters projected on Mr. Obama some notion of supernatural brilliance - our Hollywood fantasies are rife with wishes to be saved, and therefore redeemed, by our former victims - but he turned out to have a pedestrian mind. Could he possibly believe we have "a hundred years of natural gas" in the ground? Or that we're in a position to ramp up another cycle of industrial economic "growth?" Or that we can continue the web of cruel rackets that passes for medical care in this country? When the Democratic Party re-nominates Obama, it will be sealing its death warrant, and it will be on its way to the same cosmic vacuum where the memory of the Whigs lingers on.
Meanwhile, the Republicans labor to convert themselves into the party of corn-pone Nazism with all their unconcealed lust to push everybody around under the plastic eagle rubrics of "Freedom" and "Liberty." Look at the dismal lineup of morons, hypocrites, and religious fanatics arrayed for the Iowa caucus: a doctor who is also a creationist!? A leveraged buyout artist! A grifter fresh from K Street! A lady Christian theocrat wholly owned by the "dominionist" New Apostolic Reformation cult! A George W. Bush imitator showing symptoms of early onset senility! The whole posse is preoccupied with things supernatural. And being so dedicated to things unreal, they're the prime representatives of the suburban clusterfuck, who will do anything to keep that obsolete machine running, even if it means national suicide, because they lack the brains to understand where history is taking us and what the mandates of reality are shouting at us about the urgent need to reorganize American life. They are also the vassals of corporate despotism - where the Democrats are mere footservants. They masquerade as "job creators," but they promote the off-shoring of every activity that corporate America can shed in its quest for ever-greater executive compensation. The lip-service they pay to "freedom" is belied by their intent to control everybody's personal life, commoditize the public interest, and sell out their grandchildren's future for a few extra rounds of golf.
I think this gang, too, will be sent packing by the mobs of 2012. I have a nagging intimation that some third party candidate will emerge. The two personalities I keep seeing in that role are Howard Dean and Michael Bloomberg. Both of them are imperfect, but both of them are clear-headed and action-oriented, and I have a feeling that both of them are stewing in the background over the spectacle of idiocy, inertia, and dithering they see at every political compass point. Maybe somebody else will crawl out of the woodwork. I've said before in the weekly blog that conditions could deteriorate so badly that a Pentagon general might have to step into national leadership just to keep the grocery stores supplied with basic rations - but that is an outcome in my personal asteroid belt of probabilities.
Whatever party ends up running things, and whomever fronts it, is going to be in for a helluva wild ride. The USA is diving into an economic depression that will make the 1930s look like a Busby Berkeley production number. Compressive contraction will have its way with us, whatever Ben Bernanke thinks. There will simply be less activity of the kinds we're used to - Big Box shopping sprees, hamburger sales, theme park visits, house closings, you name it - than our hypertrophic system requires to keep its own destructive momentum going. Instead, the whole thing will just topple over, inert, like a 99-cent gyroscope giving into the forces of entropy. There will be a lot of bewildered, angry, dispossessed people from sea to shining sea. Not a few of them will "act out," that is, start breaking things, stealing things, targeting easy prey, hurting bystanders, and even tangling with police. Personally, I don't believe in the internment camp meme so popular among the doomer paranoiacs, but surely a lot of people will be cooling their heels in some slammer - while many other miscreants will just get away with crimes against persons and property.
The global banking system was on death-watch all through 2011. Somehow the various doctors in the central banks and finance ministries were able to muster enough accounting legerdemain to give the appearance of a system still showing a pulse. But in a compressive debt deflation, there are only so many accounting tricks you can pull off as money (and wealth) literally disappears down a cosmic worm-hole. In Europe, the process has moved from the margins toward the center. The people of Greece, Portugal, Ireland, Spain, Italy, Belgium will have less income, fewer government services, lost wages and pensions, less comfort than they have had for a couple of generations. Meanwhile, France is drowning in bad paper and the German banks are choking on it. There is really only one plausible outcome and that is default. The reckoning of the bondholders is at hand. Everybody will get poorer simultaneously - and if not, there will be not just regime change but civil war and revolution. The fantasy of a fiscal union in Europe is impossible because it means two things: that Germany will have to issue orders to everybody else; and that Germany would have to pick up the tab for everybody else while telling them what to do. Both are intolerable and implausible. Let's just think of the Euro experiment as an interesting side effect of the peak energy era... now drawing to a close.
These professional economists with their jabber about QEs and "financial repression" and bond-term "twists" and debt-to-GDP ratios are missing the point. The advanced industrial nations will not be re-jiggered onto any "growth" runway. Rather, we're entering the rutted wagon-road of de-industrializing and un-advancing. What awaits us in a "time-out" from hyperbolic technological progress. Forget about Ray Kurzweil's nanobot nirvana. That is not in the cards. Instead, wrap your mind around life in an economy organized around farming, with a much sparser distribution of big urban centers, and far fewer people overall. Don't imagine for a moment that your grandchildren will be zinging across the landscape in electric cars sampling one theme park after another while "networking" with "friends" on cyborg social networks implanted in their brain jellies. Think of them grooming their mules in the summer twilight. Anyway, you get the picture: everything that the finance ministries and treasuries and central banks are affecting to do is mere shadow theater performed in support of wishful thinking.
The question, then, is what kind of hardship and disorder will attend our journey out of the industrial era into post-technological age we are entering. Will we just turn the world into a Michael Bay movie and blow everything up? Or will we make some graceful descent and retain what is really best about the human spirit?
2012 will be the year of internal strife in these "advanced" nations, of people fighting over the table scraps of modernity among their own, in their own backyards, a desperate sorting out of the remnants. I don't think we'll see fighting between the European nations until the internal conflicts are resolved and that will take a few years.
The hot-spots for 2012 are very likely to be in the Middle East. You already know that. What could be more obvious than the tinderbox character of that region? Islamic extremism is poised to take over governments (and armies) in Egypt, Syria, Libya, possibly Algeria, and probably Pakistan. Iran lost its mind decades ago and seems determined to dominate the region by means of a strategy that can only get it into trouble (and perhaps the whole world if it goes really badly). Saber-rattling is one thing; making an actual move something else. Block the Straits of Hormuz? Not if you don't want Teheran to turn into an ashtray. That may happen anyway if Iran rattles a nuclear saber. Germany, France, Britain, and Italy, all struggling with terrible problems at home, would breathe a sigh of relief if the mullahs were chastened. The chatter around the Web about an Israeli preemptive attack never ceases. But it is a possibility.
Oh, and don't forget Turkey. Formerly the "sick man" of Europe, Turkey has become strangely resurgent, prompting some recollections that the Ottoman Empire actually administered over much of the Middle East until 1914, and not with complete incompetence, either. They just sort of imploded from empire fatigue, which is not the worst way to go down, if history is taking you there anyway. But empires come back, too, and what passes for Turkey today is a polity that in one incarnation or another has been around since the ancient Greek days, and was, for quite a long while, Rome Release 2.0.
Don't be surprised if some hostilities break out between Turkey and Iran, since a battleground named Iraq lies between them. Iraq is a basket-case despite an immense reserve of oil under its sands, and having had the US military babysit it for eight years. The last American combat units left Iraq this fall, but there are still plenty of US soldiers there, maintaining our garrisons and keeping an eye on things. The question is: can they control what the Kurds do in the north, and whatever meddling Iran engages in around the Basra oil region in the South? These American support troops remaining in Iraq could find themselves looking like a ham-and-cheese sandwich between a lot of crusty mischief north-and-south. The Turks have already had a dustup or two with Syria lately - Syria occupies a big wedge between Turkey, Iraq and the Mediterranean Sea - and Turkey will take a dim view of that nation falling into the hands of Islamic extremists if Assad gets booted.
All bets are off in Egypt. Anything can happen there.
The dangerous position of Israel vis-à-vis all these quarreling players is probably as bad as it has been in two generations. An attack by a neighbor or getting caught in a crossfire between neighbors would stimulate a lusty response, and perhaps World War Three. As if the world needed this added aggravation. It makes my kishkas ache just to think about it. Sometimes I wonder why the whole Israeli nation doesn't just pack up and move to Nebraska.
2012 is the year that China proves to be a mortal nation and rolls over with a very bad case of the vapors. Their banking system is a sham. Their property bubble is a fiasco. Their government has no formal legitimacy and will install a new leadership group this year, while exports crash and mass factory layoffs happen. There will be a lot of pissed off people in China, and they may express themselves politically in ways that have seemed unthinkable for decades. The aura of social control looms large in China, but an aura is a light garment not recommended for stormy political weather. 2012 could be the year that China begins its journey into a "Balkanized" collection of smaller autonomous parts, which is the big fat trendline for all the nations of the world, including the USA.
It is hard to think about the bizarre case of India, a nation with one foot in the modern age and the other in a colorful hallucinatory dreamtime. Their climate-change related problems are doing heavy damage to the food supply. Their groundwater is almost gone. The troubles of the wobbling global economy will take a lot pep out of their burgeoning tech and manufacturing sectors. It wouldn't be surprising if these travails prompted distracting hostilities with its failed-state neighbor, Pakistan. Pakistan, with its inexhaustible supply of Islamic maniacs could easily start a rumble with some crazy caper like the Mumbai hotel assault of two years ago, but this time India would answer with a heavy cudgel, perhaps even a nuclear sortie designed to neutralize Pakistan's dangerous toys at a stroke. And that would be that. Like cleaning out an annoying neighborhood crack house. It's not a very appetizing scenario, but what else can you do about failed states with nuclear bombs?
Turning to Japan....That sore beset kingdom is suffering all the blowback of modern times at once: the Godzilla syndrome up in Fukushima; a demographic collapse; an imminent bond crisis; the collapse of export market partners; and a long, agonizing death spiral of its banks. I stick by a prediction I tendered back in March, after the deadly tsunami: Japan will decisively opt for a return to pre-industrial civilization. Why not? The rest of the world will be dragged kicking and screaming to the same place. Let Japan get there first and enjoy the advantage of the early adapter - back to an economy of local, hand-made stuff, rigid social hierarchy, folkloric hijinks in whispering bamboo groves, silk robes, and frequent time outs for the tea ceremony.
Russia? The big bear might have just sat out another decade and enjoyed its remaining fossil fuel supply, but the temptation to project power is a demanding habit, so they make all sorts of noises about watching Iran's back - though mutual hatred abounds - and generally rushing into the power vacuum occupied by a US with dwindling mojo. There were stirrings of political discontent just few weeks ago, after the rigged early rounds of national elections, and who knows where that will lead. Vlad Putin has held things together there impressively after the meltdown of the 1990s, but apparently the tranquil veneer is thin. Except for two big cities, the sprawling nation is broke and decrepitating, with little to offer the world but oil and gas - not an inconsiderable offering, but one with certain limits especially as they drain their oil fields for export cash. The rule of law is also pretty sketchy there. The government, as ever, is a kind of gangster affair, only this time one that allows some people to get really rich, not just connected. Their 70-year experiment with Marxian dogma has probably put them off ideology for a few centuries to come, which means less money spent on prisons for people with independent thoughts and more for call girls and home furnishings. I imagine that Putin will maintain his grip through the year. The Russians will appreciate relative order more when they see a few other countries devolve into internal conflict.
I don't see much action around South America this year. Some Americans are already fleeing to Argentina. Perhaps they'll enjoy it, but there is always the menace of property confiscation, and worse. Brazil will continue to appear vibrant while it grows more population, shoving it toward eventual ruin. They will see setbacks in the development of their deep-sea oil due to an international shortage of investment capital.
Mexico's fortunes depend on its oil industry, Pemex, which faces remorseless depletion. Revenue from oil production and (dwindling) exports can't hope to keep up with continuing population growth (and ever more poverty). These trends suggest a continued loss of control for the central government and more territorial fighting among the drug gangs and other criminal mafias. As long as all those loose heads roll on the south side of the Rio Grande the US will just tut-tut off to the side. But if the gangs get bold and start venturing cross border to make mischief we will make like Woodrow Wilson did and send the regular army down to spank them. It would be a satisfying diversion for that portion of the US demographic that enjoys Ultimate Fighting on TV, though it won't get them their job back at the Pontiac plant.
The global oil picture is not so reassuring. The fragility of our supply is simply unnoticed by commuters enjoying Lady Gaga on their iPods. Meanwhile, our politicians retail fantasies of endless domestic reserves, which is total horse shit. Global exports are in remorseless decline, apart from geopolitical fissures and strains that could just paralyze allocation cold. If a hot war breaks out in the Middle East, you'll see the American supermarket shelves empty in three days. Won't that be fun. Note, too: the manias over shale oil and shale gas will reveal themselves as just more bubbles in a long cavalcade of bubbles, and both will begin to founder on a shortage of investment capital. The shale plays will prove to have been a national self-esteem-building program, not any part of an energy policy.
The abiding question as we turn the corner into the New Year is: how come Jon Corzine is still at large? (Not to mention Angelo Mozilo, plus the entire executive floor of Goldman Sachs, and about 5000 other assorted Wall Street grifters still on the loose.) There is plenty of dire talk that the collapse of MF Global, and the shenanigans around its demise involving the evaporation of segregated accounts, has gravely and permanently damaged the entire investment industry, but especially the commodities funds, who can no longer depend on the Chicago Mercantile Exchange to honestly clear trades and regulate behavior. The whole affair, and the thundering silence from the oval office, makes Barack Obama seem not just inept but somehow complicit in the looting of America. As if he needs another mark of discredit in his record of consistent fumbling. There are signs that a lot of people who still have something resembling money invested in various funds will go to cash in the weeks ahead, including under-the-mattress style. The distrust and paranoia is palpable now, with the frenzies of Yuletide bygone for another year. After all, why trust banks, especially the TBTF monsters. Such a mass move could take the starch even out of highly manipulated equity markets.
Nemesis may have her day, though. Jamie Dimon might have just gone a swindle too far for the fates to ignore him another year. JP Morgan looks to be in a peck of trouble for its role in the confiscation of MF Global accounts, not to mention its hijinks in the precious metals markets. The impudence of these rascals! In a nation when all sorts of people are murdered every day for little more reason than being in the wrong place at the wrong time, is it not a wonder that some poor swindled Grampa with nothing left to live for has not tossed a Molotov cocktail through the window of a Wall Street watering hole known to be frequented by banking poobahs? Perhaps this sort of action awaits us in 2012.
Longtime readers of this blog know how much I love predicting the Dow Jones Industrial Average to crash down to 4000 every year. I never disappoint - though I am often disappointed. In 2011, the SP index managed the delightful trick of finishing a fraction below its previous January kickoff. The stock markets have churned in range-bound purgatory for a decade while the price of a jar of pickles has multiplied four-fold. Applying the calculus, and given the pickle-DOW differential, I'd say my call was actually pretty good. In any case, this year I change the tune slightly: I predict the DJIA will go to 4000, with the catch that the number is only a way-station to 1000, which it will hit in 2014. We may be short of snow here in the Northeastern US - thanks to La Nina - yet not short of confidence that the mills of the Gods grind slowly, but grind exceedingly fine.
Finally, look for the publication of my next book round July 2012, a non-fiction work titled Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation... from The Atlantic Monthly Press. In a week, I begin work on World Made By Hand 3.
Good luck to you in 2012, and report any suspicious characters adorned with ear-plugs, quetzel feathers, and carrying obsidian knives to your nearest office of Homeland Security.

3 January update: Swans looks to the new year also.

Sunday, January 01, 2012