One of the problems with scenario planning is that it requires plausible scenarios, but that reality is [sic] behaves in ways that are implausible.
--Garry Petersen
He connects his point to the problem of "realistic" fiction in an increasingly unreal world, here.
Let's make this very, very clear: there's no real collateral for the loans. No collateral, and if you don't pay the mortgage your home is NOT at risk. As people figure that out, all hell will break loose.The reason I spent the time to explain this, is that this could be one of the factors (along with currency wars and sovereign defaults) driving a massive financial crisis over the next year or so.
______________
Here it is. Traditional mortgages are simply contract between you and your local bank:
- You agree to pay a certain amount every month (principal + interest) until the loan is paid off.
- Your home (the title) is collateral on that loan.
- If you don't pay the amount specified, your home is forfeit.
However, global banks wanted to take these dull mortgages and turn them into something institutional investors could purchase. So, they developed a complex process to do this.
First, they sold the loans to the institutional investors (as securities that they are allowed to purchase according to their charters) by removing the collateral, your home's title, from the loan.
Second, they put the title in a special pool that "simulated" the effects of collateral on the loans they sold. To accomplish this, the banks had to a create a complex process to comply with the myriad rules controlling real estate transactions (state, interstate commerce, etc.) and federal tax laws. Further, this process was very rigid. It to be completed in a specified time (within the year of the securitization) and in a specified way in order to be legal.
However, and here is where things went really wrong. The banks, and their representatives didn't do the paperwork, as required by law, on millions of mortgages. Why? In some cases the process of filing the paperwork was considered too expensive and was put off. In other cases, it was avoided because it could trigger unwanted liability given the claims made by the sellers of the loans to investors (as in: the quality of the loans was very high, when they had reason to believe this was otherwise).
In any case, the collateral was never actually transferred properly. So, the loans that were sold to investors became simple contracts:
- You agree to pay a certain amount every month (principal + interest) until the loan is paid off.
Note that there's nothing more to this loan. No collateral. No foreclosure for non-payment.
In particular, nations are threatening to get into the mindset of zero-sum economics ("beggar-thy-neighbor" was the old expression), which just means the whole system can collapse so much more quickly.States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.
The US and Britain are debasing coinage to alleviate the pain of debt-busts, and to revive their export industries: China is debasing to off-load its manufacturing overcapacity on to the rest of the world, though it has a trade surplus with the US of $20bn (£12.6bn) a month.
Premier Wen Jiabao confesses that China’s ability to maintain social order depends on a suppressed currency. A 20pc revaluation would be unbearable. “I can’t imagine how many Chinese factories will go bankrupt, how many Chinese workers will lose their jobs,” he said.
And who decides on what constitutes unfairness, or what is remedial? No Smoot-Hawley bill yet, but the trend concerns me.Plead he might, but tempers in Washington are rising. Congress will vote next week on the Currency Reform for Fair Trade Act, intended to make it much harder for the Commerce Department to avoid imposing “remedial tariffs” on Chinese goods deemed to be receiving “benefit” from an unduly weak currency.
The curved glass facade of the Vdara Hotel in Las Vegas promises a world of climate-controlled luxury. Except if you are poolside, where sunlight reflected and intensified by the building's shape has been melting plastic and burning people's hair.
...because in the real world, people differ on more than one dimension, and the terms "liberal" and "conservative" have been so misused they have lost much of their practical meaning. Occasionally, somebody points this out. Much more rarely, that someone is a journalist:
“Liberal,” in Europe, means almost the reverse of what it means in North America. In Europe, it refers to laissez-faire economic policy. And because most large parties of the European left and right are committed to maintaining large, bureaucratic welfare states, liberal parties across the continent tend to be fairly small.Is it just a problem of essentially contested concepts? No, there's something more here--deliberate obfuscation to use the emotional power of a particular word to carry an argument. And most reporters play right into it.
Liberal Democrats in Britain, the Liberal Alternative in France, Progressive Democrats in Ireland, Free Democrats (or Die Liberalen) in Germany — these smallish, also-ran parties pipe up reliably in parliament for freer markets, civil liberties and (sometimes) lower taxes. Now and then, they even form ruling coalitions with a big party on the left or right. In American English, they’d be called “neoliberal” or “libertarian.” But they’re also the parties closest in spirit to liberal democracy as it’s practiced in the United States.
Summary: All we need do is to strike Iran with all our hatred, and our journey towards the dark side will be complete.
After years of propaganda the US population has become eager for war, much like the people of Europe were in 1914...I'm not so sure the American people are eager. I do believe they could be manipulated long enough to be willing to let it happen, and then find they can't get out. The main point, however, is a good one.
It's not great for maintaining an alliance, either. Granted, mistakes happen. If they happen too often its time to reconsider the tactic.15:24 02/09/2010 KABUL, September 2 (RIA Novosti) - Six people were killed and more than 10 were injured on Thursday when NATO aviation mistakenly attacked an election rally in the country's north, local officials said.
The attack took place in the Takhar province. The NATO servicemen believed that they were targeting a militant meeting, a spokesman for the province's governor said.
Neither NATO, nor the International Security Assistance Force's commanders have commented.
Accidental attacks by NATO aviation on civilians are common in Afghanistan, and are a major cause behind growing resentment at the presence of foreign troops.
Elections to the Afghan parliament's lower house, Wolesi Jirga, will take place on September 18. The polls were initially scheduled to be held in January, but were then postponed because of "security concerns, logistical problems, and insufficient funds."
A total of 2.577 candidates, including 405 women, are expected to run.
A team of Danish volunteers has built a rocket capable of carrying a human into space, and will be launching it in a week's time. The project, which has been funded entirely by donations and sponsorship, is led by Kristian von Bengtson and Peter Madsen.Open source. It's not like Denmark, the state, has much to do with it. But that's even more amazing.
The rocket is named HEAT1X-TYCHO BRAHE, and its first test flight will carry a crash test dummy, rather than a human, so that the safety aspects of the design can be analysed. It'll launch from a floating platform that the team has also built, which will be towed into the middle of the Baltic sea by a submarine called Nautilus that the pair built as their last project.
The creators are members of the SomethingAwful web community, and have been posting pictures and answering questions there. In response to one question asking what the chances of the person inside dying are, they replied: "Unlike Columbia we're not moving at orbital speeds so 'dying a gruesome death burning up on re-entry' with our kit has a very low outcome probability."
Despite that, the rocket will still break the sound barrier, and subject the pilot (who is forced to stand inside the capsule) to considerable g-forces. As a result, the astronaut will only be able to move his arms, which will be able to operate a camera, the manual override functionality, the exit hatch, an additional oxygen mask and a vomit bag.
When the rocket hits the team's original target suborbital altitude of 150,000m (500,000 feet) and begins to descend again, parachutes will slow it and the team will track it with a GPS link and a "fast boat". The team said: "We should be able to receive a descent plot which can be used in projecting a splashdown ellipse pretty accurately, if we factor in wind speeds and so on."
The first test launch will be taking place on 31 August, 2010, and will set off from Denmark the previous day, as it takes about 36 hours of sailing to reach the site. The team's website is down at the time of writing, presumably due to the attention the launch is generating, but can be found at copenhagensuborbitals.com.
If successful, Denmark will be the fourth country to put one of its citizens into space, following the USA, Soviet Union and China, and the first in the world to do it without government funding.
As one who is opposed to centralization, I am wary of attempts to turn a grassroots movement against big government like the Tea Party into an adjunct of the Republican Party. I find it even more worrisome when I see those who willingly participated in the most egregious excesses of the most recent Republican Congress push their way into leadership roles of this movement without batting an eye -- or changing their policies!I can argue about particular policies and priorities, but it seems to me the basic point is unassailable: even if we want to have a traditional imperial engagement with the world--which I don't, for moral reasons and because of the distortions it imposes on domestic society--it is unsustainable and the attempts to sustain it as it is make the eventual failure all the more dangerous.
As many frustrated Americans who have joined the Tea Party realize, we cannot stand against big government at home while supporting it abroad. We cannot talk about fiscal responsibility while spending trillions on occupying and bullying the rest of the world. We cannot talk about the budget deficit and spiraling domestic spending without looking at the costs of maintaining an American empire of more than 700 military bases in more than 120 foreign countries. We cannot pat ourselves on the back for cutting a few thousand dollars from a nature preserve or an inner-city swimming pool at home while turning a blind eye to a Pentagon budget that nearly equals those of the rest of the world combined.
Almost two dozen Tea Party-affiliated lawmakers cosponsored a new resolution late last week that expresses their support for Israel "to use all means necessary to confront and eliminate nuclear threats posed by the Islamic Republic of Iran, including the use of military force."Note: Dr. Paul did not agree. He has also refused to join the new "tea party" caucus.
Vladimir Putin is an amazing man. You may have seen him co-piloting anWhat a guy. Of course it's not a problem unique to Russia. In North Korea, the "Dear Leader" is credited with the ability to control the weather. On his first trip to a golf course. he shot 38 under par, including five holes-in-one. And don't even get me started on his prowess at bowling.
aircraft recently and dumping 12 tons of water to extinguish two of the many wildfires raging across Western Russia. But did you know that in 2008 he used a tranquilizer gun to save a group of scientists and a television camera crew from a charging tiger? In 2009, he saved
Russian shoppers from high prices by ordering a grocery store executive to put sausages on sale, forced one of the world's richest men to restore laid off workers to their jobs by reopening a cement plant, taught judo to the Russian national judo team, and went to the bottom of the world's deepest lake in a submarine. In April, he hugged a polar bear. He swims Siberian rivers for exercise and enjoys bare-chested summer horseback rides. Without question, women
love him. It's said that he will never have a heart attack, because his heart isn't foolish enough to attack him. Or maybe that's somebody else.
The politician asked about the possibility of a coup. The general, he
said, deeming the talk serious, pulled out a map of the capital and
provided a disconcertingly elaborate plan to execute one: overturning
trucks to block the route from the main American base to the Green Zone,
seizing television stations, besieging Parliament, and so on.
“When you’re president,” he quoted the general as asking, in utter seriousness, “can you make me minister of defense?”
Gates has proposed initial reforms that include dismantling one command and eliminating 50 generals. To put this in context, we have almost 1,000 generals and admirals, a number that has grown 13 percent in 15 years, even as the armed forces have shrunk. Every layer of Pentagon bureaucracy is much larger than it was at the height of the Cold War. Paul Light of New York University's Wagner School of Public Service notes that in 1960 we had 78 deputy assistant secretaries of defense. There are 530 today. Gates likes to point out that there are more musicians in U.S. military marching bands than members of the Foreign Service. In fact, the Pentagon has 10 times as many accountants as there are Foreign Service officers.
as long as China holds more than $1.052 trillion
in US Treasury bonds, it will get its way on defense issues that the
administration considers not vital or needlessly provocative. For now,
the Treasury Department rules, except in Afghanistan.
The ironies here are remarkable. For starters, you have some of the sameYou can tell a lot about a man by the quality of his enemies. If these guys are against Sestak, I want to be on his side.
geniuses who dreamed up and sold the Iraq War -- one of the dumbest blunders
in the annals of U.S. foreign policy -- joining forces with someone who thinks U.S. Middle
East policy ought to be based on his interpretation of Old Testament prophecy. They're
going after a retired three-star admiral in the U.S. Navy, who also happens to have a Ph.D.
in political economy and international affairs from Harvard. Given their track record over
the past decade, this is actually a stunning endorsement of Sestak's candidacy. Criticism from
these folks is like having Lindsay Lohan complain about your lifestyle choices, or having
BP president Tony Hayward offer advice on environmental safety and public relations.
the willfully blind reformers, civil societyThis doesn't mean that war is the best--or only--option. It doesn't mean we automatically ratchet up the pressure because we don't like how a government is treating its neighbors or its own people. It often makes sense to get the best deal one can. But it does mean doing so with a clear vision, not with the illusion that we are dealing with good people.
activists, clergy, students and others whose foolishness and ignorance
was a necessary condition for tens of millions of deaths in the last
hundred years. Unreflective, self-righteous ‘activists’ thought that to
espouse peace was the same thing as to create or safeguard it. As a
result, tens of millions died. Unless this kind of thinking is exposed
and repudiated, it is likely to lead to as many or more deaths in the
21st.
He and I may quibble on the details, but I suspect he's closer to the truth than most others are. Change is coming, and to paraphrase Winston Churchill on Americans, we're going to do the right thing--after we try everything else.In 1965 executives at Shell wanted to know what the world would look
like in the year 2000. They consulted a range of experts, who speculated
about fusion-powered hovercrafts and "all sorts of fanciful
technological stuff". When the oil company asked the scientist James
Lovelock, he predicted that the main problem in 2000 would be the
environment. "It will be worsening then to such an extent that it will
seriously affect their business," he said."And of course,"
Lovelock says, with a smile 43 years later, "that's almost exactly
what's happened."Lovelock has been dispensing predictions from
his one-man laboratory in an old mill in Cornwall since the mid-1960s,
the consistent accuracy of which have earned him a reputation as one of
Britain's most respected - if maverick - independent scientists. Working
alone since the age of 40, he invented a device that detected CFCs,
which helped detect the growing hole in the ozone layer, and introduced
the Gaia hypothesis, a revolutionary theory that the Earth is a
self-regulating super-organism. Initially ridiculed by many scientists
as new age nonsense, today that theory forms the basis of almost all
climate science.For decades, his advocacy of nuclear power
appalled fellow environmentalists - but recently increasing numbers of
them have come around to his way of thinking. His latest book, The
Revenge of Gaia, predicts that by 2020 extreme weather will be the norm,
causing global devastation; that by 2040 much of Europe will be
Saharan; and parts of London will be underwater. The most recent
Intergovernmental Panel on Climate Change (IPCC) report deploys less
dramatic language - but its calculations aren't a million miles away
from his.As with most people, my panic about climate change is
equalled only by my confusion over what I ought to do about it. A
meeting with Lovelock therefore feels a little like an audience with a
prophet. Buried down a winding track through wild woodland, in an office
full of books and papers and contraptions involving dials and wires,
the 88-year-old presents his thoughts with a quiet, unshakable
conviction that can be unnerving. More alarming even than his
apocalyptic climate predictions is his utter certainty that almost
everything we're trying to do about it is wrong.On the day we
meet, the Daily Mail has launched a campaign to rid Britain of plastic
shopping bags. The initiative sits comfortably within the current canon
of eco ideas, next to ethical consumption, carbon offsetting, recycling
and so on - all of which are premised on the calculation that individual
lifestyle adjustments can still save the planet. This is, Lovelock
says, a deluded fantasy. Most of the things we have been told to do
might make us feel better, but they won't make any difference. Global
warming has passed the tipping point, and catastrophe is unstoppable."It's
just too late for it," he says. "Perhaps if we'd gone along routes like
that in 1967, it might have helped. But we don't have time. All these
standard green things, like sustainable development, I think these are
just words that mean nothing. I get an awful lot of people coming to me
saying you can't say that, because it gives us nothing to do. I say on
the contrary, it gives us an immense amount to do. Just not the kinds of
things you want to do."He dismisses eco ideas briskly, one by
one. "Carbon offsetting? I wouldn't dream of it. It's just a joke. To
pay money to plant trees, to think you're offsetting the carbon? You're
probably making matters worse. You're far better off giving to the
charity Cool Earth, which gives the money to the native peoples to not
take down their forests."Do he and his wife try to limit the
number of flights they take? "No we don't. Because we can't." And
recycling, he adds, is "almost certainly a waste of time and energy",
while having a "green lifestyle" amounts to little more than
"ostentatious grand gestures". He distrusts the notion of ethical
consumption. "Because always, in the end, it turns out to be a scam ...
or if it wasn't one in the beginning, it becomes one."Somewhat
unexpectedly, Lovelock concedes that the Mail's plastic bag campaign
seems, "on the face of it, a good thing". But it transpires that this is
largely a tactical response; he regards it as merely more rearrangement
of Titanic deckchairs, "but I've learnt there's no point in causing a
quarrel over everything". He saves his thunder for what he considers the
emptiest false promise of all - renewable energy."You're never
going to get enough energy from wind to run a society such as ours," he
says. "Windmills! Oh no. No way of doing it. You can cover the whole
country with the blasted things, millions of them. Waste of time."This
is all delivered with an air of benign wonder at the intractable
stupidity of people. "I see it with everybody. People just want to go on
doing what they're doing. They want business as usual. They say, 'Oh
yes, there's going to be a problem up ahead,' but they don't want to
change anything."Lovelock believes global warming is now
irreversible, and that nothing can prevent large parts of the planet
becoming too hot to inhabit, or sinking underwater, resulting in mass
migration, famine and epidemics. Britain is going to become a lifeboat
for refugees from mainland Europe, so instead of wasting our time on
wind turbines we need to start planning how to survive. To Lovelock, the
logic is clear. The sustainability brigade are insane to think we can
save ourselves by going back to nature; our only chance of survival will
come not from less technology, but more.Nuclear power, he
argues, can solve our energy problem - the bigger challenge will be
food. "Maybe they'll synthesise food. I don't know. Synthesising food is
not some mad visionary idea; you can buy it in Tesco's, in the form of
Quorn. It's not that good, but people buy it. You can live on it." But
he fears we won't invent the necessary technologies in time, and expects
"about 80%" of the world's population to be wiped out by 2100. Prophets
have been foretelling Armageddon since time began, he says. "But this
is the real thing."Faced with two versions of the future -
Kyoto's preventative action and Lovelock's apocalypse - who are we to
believe? Some critics have suggested Lovelock's readiness to concede the
fight against climate change owes more to old age than science: "People
who say that about me haven't reached my age," he says laughing.But
when I ask if he attributes the conflicting predictions to differences
in scientific understanding or personality, he says: "Personality."There's
more than a hint of the controversialist in his work, and it seems an
unlikely coincidence that Lovelock became convinced of the
irreversibility of climate change in 2004, at the very point when the
international consensus was coming round to the need for urgent action.
Aren't his theories at least partly driven by a fondness for heresy?"Not
a bit! Not a bit! All I want is a quiet life! But I can't help noticing
when things happen, when you go out and find something. People don't
like it because it upsets their ideas."But the suspicion seems
confirmed when I ask if he's found it rewarding to see many of his
climate change warnings endorsed by the IPCC. "Oh no! In fact, I'm
writing another book now, I'm about a third of the way into it, to try
and take the next steps ahead."Interviewers often remark upon the
discrepancy between Lovelock's predictions of doom, and his good
humour. "Well I'm cheerful!" he says, smiling. "I'm an optimist. It's
going to happen."Humanity is in a period exactly like 1938-9, he
explains, when "we all knew something terrible was going to happen, but
didn't know what to do about it". But once the second world war was
under way, "everyone got excited, they loved the things they could do,
it was one long holiday ... so when I think of the impending crisis now,
I think in those terms. A sense of purpose - that's what people want."At
moments I wonder about Lovelock's credentials as a prophet. Sometimes
he seems less clear-eyed with scientific vision than disposed to see the
version of the future his prejudices are looking for. A socialist as a
young man, he now favours market forces, and it's not clear whether his
politics are the child or the father of his science. His hostility to
renewable energy, for example, gets expressed in strikingly Eurosceptic
terms of irritation with subsidies and bureaucrats. But then, when he
talks about the Earth - or Gaia - it is in the purest scientific terms
all."There have been seven disasters since humans came on the
earth, very similar to the one that's just about to happen. I think
these events keep separating the wheat from the chaff. And eventually
we'll have a human on the planet that really does understand it and can
live with it properly. That's the source of my optimism."What
would Lovelock do now, I ask, if he were me? He smiles and says: "Enjoy
life while you can. Because if you're lucky it's going to be 20 years
before it hits the fan."
This was an avenue that both Iceland and Serbia took during their economic crises, and each time the EU responded with financial aid of its own to counter Moscow’s rising influence. A Russian loan to Greece — no matter what the actual size of the aid package — would be a psychological blow to EU unity. An EU member state — a eurozone state no less — finding financial assistance in Russia rather than among its fellow euro users would lay bare the EU’s inefficiency, particularly in times of crisis management. Moscow would therefore send a powerful message to Central European states that see the EU as a counter to Russian spheres of influence on their borders.China has the problem that it's stuck between saying no to helping Iran resist American sanctions--which would undermine its claim to counterbalance American power in the region--or try to block the sanctions--which it doesn't have the immediate infrastructure to do, and would encourage more Sino-US tensions.
While sanctions may not specifically target Iranian oil exports, Beijing reasonably fears they could create a chain reaction jeopardizing its oil supplies not only from Iran, but also from the rest of the Gulf, since these shipments pass through the Strait of Hormuz where Iran is most likely to aim any retaliation. While China’s economic growth rate is high, serious vulnerabilities exist in the banking, property and export sectors, all of which the government is attempting to address without triggering a destabilizing slowdown. Now would be an exceedingly bad time for a sudden energy shock.
From the Chinese perspective, it's one more reason to develop a much greater naval presence, or to work out some kind of arrangement that makes China's access to oil less dependent on the good will of the US Navy.
Moreover, much of the credibility of China’s claims to rising international status rest on its ability to defend smaller states like Iran that are antagonistic to the United States. If China drops Iran at the first sign of American coercion, a host of other states — in Latin America, Africa and Southeast Asia — will rethink whether they can rely on China for support. In such a case, Chinese leaders would struggle to allay domestic outrage at yet another example of acquiescence to the United States, while much of the political capital they have painstakingly built up in recent years through speeches, state visits and investments across the world would be squandered.
Did East Germans originate from apes? Impossible. Apes could never have survived on just two bananas a year.What do our jokes say about us?
What would happen if the desert became communist? Nothing for a while, and then there would be a sand shortage.
Why does West Germany have a higher standard of living than we do? Because communists can't get work permits there.
A new Trabi [one of the planet's most god-awful cars, and pride of the GDR] has been launched with two exhaust pipes -- so you can use it as a wheelbarrow.
Hat tip: Harvard Business Review; Organizations and Markets blog