Thursday, January 31, 2008

Ants, Terrorism and Memes

I think I may have just found a framework to hang my a final paper topic on for my class in Nonproliferation Issues of Weapons of Mass Destruction (yes, I'm starting grad school in nuclear engineering - with a bunch of kids half my age, won't this be fun).

Hat tip to John Robb for referencing the video in this blog post.

Wednesday, January 30, 2008

A Dearth of Original Thinking

A recent article by Michael Tanji addresses some specific problems in the intel community, but, frankly, are applicable to society at large.

A Dearth of Fresh Ideas
Money & Technology Will Not Save Us: Clear, Original Thinking Will
By Michael Tanji
January 16, 2008

From a security and intelligence perspective, the new year in the long war has started out like previous years. Faced with serious and often overwhelming problems, the government proposes several solutions aimed at improving our security that are almost certain to fail to achieve that objective...

...unless we start infusing some clear, original thinking into our intelligence and security problem-solving efforts, we resign ourselves to old-think, improper solutions, and future intelligence failures.

Tuesday, January 29, 2008

First Stirrings of the Great Energy Crisis

We've discussed energy here at FutureJacked, but usually in the context of Peak Oil or Nuclear Power. I'd like to step back from these narrow, if important topics, and key in on the nature of the coming Energy Crisis itself, namely that it is a crisis of the Growth Model of Economics.

Personally, this is a model I love. Economic growth has allowed the masses to shatter the chains of ag-based feudalism and stagnant societies that constrain human ability under cloying webs of tradition and outright oppression - because in a static, agricultural society, everyone must be pulling in the same direction and limit risk in order to produce enough food to pay off the ruling classes and keep everyone fed. Everything else is secondary.

Growth led to the Industrial Revolution, which helped obliterate chattel slavery in the civilized portions of the world. It allowed women to move to prominent places of authority and responsbility in economic and political realms. It has led to cheap ice cream and low-cut sundresses that make your woman shine with beauty and good booze and cheap food and air conditioning and... it is all about to transition to a new model, a model that we don't have much, if any, recorded history to learn from.

This is the model of declining supplies of cheap fuel. Of disruptions in industry. Of declining infrastructure. This too shall pass, but it will be a long, long journey through this coming twilight.

Dr. Albert Bartlett makes this very, very clear in Arithmetic, Population & Energy:

Alas, Dr. Bartlett is relying on math, and science and facts. He should have had Britney Spears do it, with a cameo by Brad Pitt. Maybe people would have paid more attention then. Folks will be paying attention, and probably within two or three years. But by then, the time will have passed to mitigate the worst of the situation and, as usual, the average citizens will pay the heaviest price.

I was reminded of this upon reading the situation in South Africa. A sort of Catastrophic Abundance has taken hold there - where growth rates outstripped the infrastructure to handle it. Growth helps raise expectations, helps give people hope for a materially better future - and if those hopes are dashed, well, South Africans can look north to Zimbabwe and Kenya to see how rapidly a supposedly stable and reasonably prosperous country can hollow out into a bloody Mad Max free-for-all of tribal passions and rage.

It also shows the desparate need for long-term thinking when it comes to energy supplies. The U.S. is at a critical time for this. We can at least begin to secure a significant increase in baseload energy supplies through nuclear power plants - something to help face the agony that will sweep the continent when petroleum supplies begin to draw down and become unrealiable. We can learn from South Africa, or we can ignore it. Let's guess which path the current generation of "leaders" will choose.

South Africa Blackouts Snarl Traffic, Shut Cartier, Vex Mbeki
By Antony Sguazzin

Jan. 24 (Bloomberg) -- Workers at Johannesburg's Tre Gatti Cucina restaurant spent peak business hours last week wiping down tables and folding napkins by candlelight, their kitchen idled by South Africa's worst-ever blackouts.

With the country's power monopoly, Eskom Holdings Ltd., predicting shortages until at least 2013, the six waiters and kitchen workers may soon be out of work...

...The outages may scupper the government's aim of boosting economic growth to 6 percent, the level it says is necessary to cut a 25.5 percent jobless rate. On Jan. 21, Eskom brokered an agreement "in principle'' to cut power supplies to the biggest users, including mining companies BHP Billiton and Anglo American by as much as 15 percent.

"That's not a joke. You are taking 10 to 15 percent of your production away,'' said Jasper Pieters, operations director at Mitsubishi Corp.'s Hernic Ferrochrome Ltd., which uses 200 megawatts of power, enough to supply 200,000 U.S. homes. ``When will power be restored? We don't know. If that's the case then I am afraid it's going to go to job cuts.''

South African President Thabo Mbeki in December apologized to Eskom for failing to heed the utility's call in 2000 to start increasing generation capacity as the economy grew and it extended power to poor townships built under apartheid...

Kenya on the Edge

I have continued to hold out hope that Kenya can find a way to step back from the abyss. One by one the lights have gone dim in sub-Saharan Africa. Zimbabwe has gone into death spiral worthy of an Ayn Rand novel. Congo, Rwanda, and Uganda all bear the scars of ethnic war.

Kenya was always a little different - not a lot different, but just enough went right to give hope that some sort of workable state could be forged from the ethnic soup.

But now?

Kenya's Opposition Urges Calm After Lawmaker Killed
By Paul Richardson and Eric Ombok

Jan. 29 (Bloomberg) -- Kenya's main opposition party appealed for calm after one of its lawmakers was killed, as the protagonists in a dispute over last month's election prepared to start formal talks to end the crisis.

Mugabe Were, the member of Parliament for the Embakasi constituency in eastern Nairobi, was shot dead outside his home early today, police spokesman Eric Kiraithe said. Two gunmen were involved in the attack, Kiraithe said in an interview on Kenya Television Network, a closely held broadcaster.

"This is a new level of escalation in the already terrible violence that we are seeing,'' Salim Lone, spokesman for the opposition Orange Democratic Movement, said in a telephone interview from Nairobi. ``We must be peaceful. We can only find a way out of this through peace, not through further killings.''

More than 750 people have died and 255,000 have been displaced by violence in Kenya since a Dec. 27 presidential election that the ODM said was rigged to keep President Mwai Kibaki in office...

Monday, January 28, 2008

Monday Blogstringing

Check out the new look at Jeff Vail's blog - Rhizome, Weekly Notes on Emergent System, Geopolitics, Energy and Philosophy

Also, Mish has a new must-read post entitled 60 Minutes Legitimizes Walking Away

Keep your eyes on the markets as well. I still have DJIA 12,500 as my critical point - if we can get back above that line, it should be "business as usual" for the most part, but if we can't overcome that resistance, watch out below...

Friday, January 25, 2008

That Dark Music

Anyone who has ever watched a horror movie knows the drill. One of the designated soon-to-be-dead co-stars is easing his way down the hall. Just before meeting a horrible fate, spooky music wells up around the audience and everyone in the theater knows, seconds in advance, that something awful is about to strike.

Cue the spooky music:

Drugs, Guns, Remote-Controlled Bombs in Massive Silicon Valley Sting
For years, my friends in bomb squads have been warning me that it was only a matter of time before Iraq-style remote-controlled explosives came to America. Well, here they are, dead smack in the middle of an sprawling network of thieves, drug dealers, and possible terrorists.

As usual, Bill Lind is way ahead of his time...

Thursday, January 24, 2008

Thoughts on the Markets

For you traders and investors out there, here's a YouTube clip of Robert Prechter discussing the tools he uses to measure markets.

That's a short answer to the questions about where the markets are headed. If you want to take 30 seconds to register at EWI, you can get a more in-depth version. Good stuff.

The Beltway Geniuses are Funny

I'm sure the managers of those Sovereign Wealth Funds are oh so scared:

Wealth Funds Hear Disclosure Warning in Davos Meeting
By Yoolim Lee and A. Craig Copetas, Bloomberg

Jan. 24 (Bloomberg) -- Leaders of world finance told the holders of $2.5 trillion in sovereign wealth funds that they need to reveal more about their activities or risk further antagonizing American politicians.

In a meeting in Davos, Switzerland, that included chief executive officers James Dimon of JPMorgan Chase & Co., Lloyd Blankfein of Goldman Sachs Group Inc., John Mack of Morgan Stanley and Stephen Schwarzman of Blackstone Group LP, representatives of government-controlled investment funds from Kuwait, Saudi Arabia, Malaysia, Russia and South Korea heard that "Washington'' would demand more disclosure if they didn't provide it, according to a person who was in the room...

...And after "Washington" demands that disclosure and "Washington" is told to go piss up a rope? What then? My guess is that the reporters left out the laughter that probably erupted after that comment.

The U.S. is facing a general insolvency crisis - at a federal level, at the level of the major banks and at an individual level. If the only people with money to help paper over that looming crisis yank that cash out, what then?

This generation of governing and corporate elites can't do basic math, apparently. Or maybe they can.

My guess is that this is showmanship to placate the public. It would be a lot more impressive if "Washington" and "Wall Street" didn't have scabbed knees and salty lips from servicing these Sovereign Wealth Funds in exchange for some cash. My country has sunk to this. Pardon me while I go puke.

Wednesday, January 23, 2008

The Cusp

I can't express to you how strongly I believe that we are at an enormous cusp of events. I know I work with a model that is not favored by many - at least not right now - that of viewing events as being driven by a human "herding impulse" (or, as Alan Greenspan referred to the positive side of it recently, as "human euphoria") under the label "socionomics". I hope you have your fiscal and personal house in order. If mood collapses, taking the markets with them, turmoil in foreign and domestic affairs is not far behind.

Action Items
  1. It's been awhile, so go back and do a Gambler's Analysis on your situation.
  2. For those of you with an interest in the markets, I strongly suggest signing up for the free Elliott Wave Webinar being held this afternoon. The bright men and women at EWI have made some very accurate predictions over the last several months. It's a good idea to see what they are thinking.
  3. Don't Panic. Even if we see a slide in the markets and chaos in the streets. Don't Panic.
  4. Review your copy of Catastrophic Abundance and go back over some of the exercises.

Tuesday, January 22, 2008

The Fed Whores the Last of Its Credibility

Well, we'll see if this works. Because if it doesn't, the myth of Fed omnipotence and omniscience will go up in smoke - and that would have catastrophic effects on market confidence.

Fed cuts interest rates in emergency move
WASHINGTON (Reuters) - The Federal Reserve on Tuesday slashed benchmark U.S. interest rates by a hefty three-quarters of a percentage point in an emergency bid to lend support to a weak U.S. economy faced with increasing turmoil in global financial markets.

Time to go back through some of the scenarios in Catastrophic Abundance and see how your preparation stacks up.

Monday, January 21, 2008

An English Major Does the Great Collapse

James Howard Kunstler - author, gadfly, amateur Cassandra - has been tracking the unfolding credit crisis for awhile now. At least his writings on the subject have a fun mix of lyrical poetry and bald profanity, a nice change from the one-track "buy gold, ammo and food" stuff that passes for contrarian analysis these days (Elliott Wave International excepted).

Fullblown Panic
...I resort to such admitted extreme hyperbole because it may be the only language that an infotainment-drunk society can still process in the face of an epochal calamity that will transform the lush terms of everyday life as we've known it into something like a bleak surrealist landscape in the manner of Tanguy. That crashing sound out there is the armature of confidence needed to support an economy based on faith that borrowed money will be paid back. It's as simple as that. (Doesn't seem so exciting now, does it?)..

The market futures look ugly right now, but the Bankers have a day off to do what they can to arrange a reversal - temporary though it might be.

Sunday, January 20, 2008

We Don't Need No Stinking Badges...

As socionomics would suggest, the secession meme continues to slowly metastisize...

Montana Governor Foments Real ID Rebellion
By Ryan Singel
January 18, 2008
Montana governor Brian Schweitzer (D) declared independence Friday from federal identification rules and called on governors of 17 other states to join him in forcing a showdown with the federal government which says it will not accept the driver's licenses of rebel states' citizens starting May 11.

Saturday, January 19, 2008

Posting Will Be Spotty...

I do have some new posts in the works, but am busy trying to get a patent filed, so blogging will be relegated to the backburner for a week or so.

Continue to keep an eye on the credit markets - especially municipal bonds, and pay attention to stories out of Pakistan and Mexico. If my guess is correct, we are moving back into a period of upheaval, and out of the relative calm we've experienced on the sociopolitical front for the last year or so.

Live Elliott Wave Webinar Opportunity

FYI for you traders out there, and others interested in portfolio management, here is a free opportunity from Elliott Wave International.

Thursday, January 17, 2008

Fuel for the Socionomic Fire

Hmmmm. I wonder if there are any politically-active radicals out there who might take an issue like this and run with it, especially in an environment of increasing negativity towards business-as-usual?

Wall Street Bonuses Hit Record $39 Billion for 2007
By Christine Harper, Bloomberg

..."To many people, it will be shocking and questionable,'' said Jeanne Branthover, managing director of Boyden Global Executive Search in New York. "People in New York in the world of investment banking will understand it. It's critical that pay is still there or you're going to lose really good people.''

The industry's bonuses are larger than the gross domestic products of Sri Lanka, Lebanon or Bulgaria, and the average bonus of $219,198 is more than four times higher than the median U.S. household income in 2006, according to data compiled by the U.S. Census Bureau...

Nah, surely not. Keep paying those bonuses Boyz, we wouldn't want all that "talent" to turn their energies from jamming derivative products on unsophisticated buyers towards things like rebuilding the nation's transportation infrastructure, revitalizing agriculture or other such old-fashioned pursuits.

Let the masses (they're asses, right?) eat cake. All will be well once we get a little more sovereign wealth fund money to finance the toxic balance sheets of some of America's biggest finance companies...

I'm not agitating for radical politics. Radicals have on more than one occasion plunged a country into bloody chaos in their zeal to "fix" things. I'm just pointing out that stories like this indicate that the U.S. is storing huge vats of potentially explosive social resentment right next to the building fires of recession, anger and a disgust with politics as usual.

Cramer on the Banks

"[The banks have] written down the bad parts. They don't realize that the good parts are bad too..." - Jim Cramer on CNBC, January 17, 2008

I'm not Jim Cramer's biggest fan, but he was on CNBC this morning and his comments are worth paying attention to.

Tuesday, January 15, 2008

Tripwire: Dow 12,500

FYI, the Dow Jones Industrial Average is at a cusp. The DJIA closed today at 12,501.11. If my interpretation of recent market behavior is correct, then a break below 12,500 will reflect a significant deepening of negative mood. This is not trading advice, just a quick peek into my thinking at this point.

Using my interpretation of socionomics, here are two scenarios that might unfold, based on the underlying social mood as reflected in the markets:

Expected Events after a significant break below 12,500
  1. Expect the campaigns of Edwards and Huckabee to strengthen. This may not happen in time to affect the nomination process, but it should become noticeable at the conventions that a radical tone is taking hold. Expect a fractured presidential race, with Bloomberg entering and Ron Paul running as either an independent or Libertarian.
  2. Markets will weaken significantly throughout 2008, interrupted by ferocious bear market rallies. "Buy and Hold" will take a beating as an investment philosophy.
  3. The corporate bond market will face at least one phase of illiquidity as investors stop buying because they are unable to get a clear picture of company balance sheets
  4. Taxes rise, services decline, the U.S. federal budget situation becomes a crisis as some major foreign bond investors demand that Congress raise taxes or rationalize spending in order to make sure bond owners get their payouts.
  5. Secession movements gain headlines, but make no material gains. Yet.
  6. Violence spills over from a Mexico in collapse into California, Arizona, New Mexico and Texas.
  7. Bank failures ripple across the country. Most are handled via mergers and asset sales facilitated by the FDIC, but millions will find themselves unable to access "their" money at some point during the year.
  8. California's state government defaults on bonds. Violence sweeps Southern California, much of it fueled by ethnic gangs.
  9. By December of 2008, a radicalized third party will have formed.
  10. Anger, torture and violence saturate mainstream media and art.

Expected Events after a significant bounce from current levels, breaking 14,000
  1. The status quo will rule politics in the U.S. Obama or Hillary wins the White House.
  2. Commodities go into blow-off mode, fueled by fears of Peak Oil and a full-blown ethanol craze
  3. Stock indices skyrocket through most of 2008, even as select finance companies and banks fail. Foreign money floods the banking system.
  4. The U.S. dollar collapses and new manufacturing start-ups become significant in the South, in Idaho and portions of the Midwest. Much of this is fueled by an electric car craze.
  5. Theft of copper from power substations becomes endemic in urban areas.
  6. Real wages rise.
  7. The U.S. housing market stabilizes, though sales continue to drop.
  8. U.S. consumers have a window to use their rise in real wages to pay down debt

Offering To Do My Part

If the bright minds over at the Nuclear Energy Institute (NEI), need some volunteer help to educate the good folks of Nevada on the various aspects of the back-end of the closed fuel cycle and the need for some sort of storage at Yucca Mountain, I can help.

Jan. 15 (Bloomberg) -- Tori, a 37-year-old Las Vegas stripper, is an unlikely person to set national energy policy.

As a voter in Nevada's Jan. 19 Democratic presidential caucuses, that's just what she'll help to do when she chooses which candidate to support. The most important issue for her is the U.S. Department of Energy's plan to store spent nuclear fuel at Yucca Mountain, an extinct volcano about 100 miles northwest of Las Vegas...

...Back at the Las Vegas gentlemen's club where Tori works, her colleagues also aren't unanimous on the issue. Suzanne Nakata, a 27-year-old waitress who doesn't disrobe because she "might run for office one day,'' says Nevadans need to reconsider their opposition to Yucca Mountain if they want to reduce America's greenhouse-gas emissions...

I figure NEI could spring for a room at the MGM Grand, set me up with a fat stack of cash and I could spend the weekend spreading the word to Tori, Suzanne and their friends and associates. I've still got my copy of Tsoulfanidis' Nuclear Fuel Cycle: Analysis and Management and we could go over Chapter 9 between lap dances. Maybe I could even get them interested in forming a Women in Nuclear chapter for the Vegas Strip? Talk about a direct investment of public educational resources...

It would be a rough job, but someone has to do the heavy lifting in educating the public. I'm here to help.

*Above graphic from The Flying Studio.

The Bazaar of Violence, Open for Business in Mexico

If we view the recent surge in violence down Mexico way through the GlobalGuerrillas lens, we find a bazaar of violence that is open for business. Business may be slow, at the moment, but like most network effects, the ramp-up rate can be amazingly fast...

From a Stratfor Mexico Security Memo from January 14th:

...Another hot spot this week was Cancun, in Quintana Roo state, where police exchanged gunfire with armed suspects in broad daylight near a soccer stadium and a supermarket. The incident reportedly began when gunmen attempting bring a kidnap victim into a safe house were intercepted by police, who opened fire on the suspects. Two people were killed and five wounded in the firefight, in which the suspects used assault rifles and fragmentation grenades.

Several of the suspects reportedly fled the house during the encounter, but not before apparently booby-trapping a body inside. Police reported finding one body inside the house holding a grenade whose pin had been pulled. Such tactics are not common in Mexico, though they reinforce concerns that Mexico’s drug trafficking organizations will continue to shift tactics as they face increasing pressure from authorities. Indeed, U.S. counternarcotics sources say that Mexican drug cartels are insufficiently armed to combat Mexican military forces in head-to-head battles but have an advantage in conducting a guerrilla insurgency...

And that is just a highlight from a report that includes data on a counternarcotics convoy that was ambushed in Michoacan state, the arrest of airport officials implicated in drug smuggling and a story on how the police in Playas de Rosarito were banned from carrying their firearms while an investigation went forward to their possible ties to organized crime.

State mechanisms infiltrated by armed non-state actors. A spread of tactics to now including IED's wired to corpses (how long before we move up to house-staged IEDs?). Lot's of money to fund the non-state actors. If the GlobalGuerrillas meme gets firmly implanted in Mexico, look for some intense blowback north of the Rio Grande.

Reuters is Funny

These guys are hilarious.

Retail sales unexpectedly declined in December

WASHINGTON (Reuters) - Sales at U.S. retailers fell 0.4 percent in December and were less vigorous in November than previously thought, according to a government report on Tuesday that implied costlier energy and slumping housing prices were taking a toll on consumers.

Retail sales for all of 2007 posted their smallest gain in five years...

Unexpectedly? Uh, no. Do these "reporters" ever actually get out in the real world and dig into stories? Or do they just parrot what various corporate and NGO news releases say? Uh, on second thought, don't answer that.

And, while we are at it, our friends at CitiGroup are in the process of reaping the whirlwind of bad underwriting, bad financial practice and a serious breach of their fiduciary responsibility. And over 20,000 employees get to pay for the mistakes of management.

Citigroup to raise $14.5 billion after historic loss
By Jonathan Stempel and Dan Wilchins

NEW YORK (Reuters) - Citigroup Inc on Tuesday said it is raising at least $14.5 billion and cutting its quarterly dividend 41 percent to help shore up a capital base depleted by losses on subprime mortgages and consumer credit.

The largest U.S. bank also posted its first quarterly loss since Citigroup's creation in 1998, hurt by $18.1 billion of write-downs and related expenses for exposure to subprime debt, plus a $4.1 billion increase in U.S. credit costs.

The net loss was $9.83 billion, or $1.99 per share, roughly twice as large as analysts expected. Citigroup cut its quarterly dividend to 32 cents per share from 54 cents, a move that could save it more than $4 billion a year.

"You expected the figures to be shocking," said Simon Maughan, an analyst at MF Global in London. "You cannot say it's definitively over but you have got to say this is probably the big one..."

No, Mr. Maughan, you DON'T have to say this is probably the big one. If the credit unwind has proven anything, it has proven that.

This is the best that our Business Schools can churn out?

Monday, January 14, 2008


This will be a busy week. Let's lead off with John Robb's latest selection of GlobalGuerrilla-related articles: NGO's & Hollow States, Economic Black Swans, and Transnational Crime

And Citigroup could write down up to $24 billion

And, one of the many tech answers to rising oil prices is that people are getting Charged up by electric cars

And I rented the movie Primer over the weekend. Fantastic flick (for an engineer)! For the scientifically inclined out there, it is an outstanding piece of speculative fiction. The ending comes at you quick and I am still trying to figure out the many angles.

Have a successful and safe week. Keep your powder dry and may you be able to keep your head when all about you are losing theirs and blaming it on you...

UPDATE: Also check out Fabius Maximus' post Diagnosing the eagle, chapter IV - Alienation.

Sunday, January 13, 2008

California DeathWatch (Part Two)

Here's Mish's take on how The Governator might handle the self-inflicted budget crisis that California is facing.

Mish's California Budget Proposal
California has a huge budget problem. It also has a huge governor problem. Schwarzenegger's one size fits all solution of reducing everything 10% to meet the budget crisis is a copout...

California does still lead the nation - in governing style, in political thinking and a host of social and economic trends. Facing the most significant economic challenges in over a decade and exposed to a rotting real estate sector and ballooning debt payments (bonds, government pensions, etc.), the best that the wealthiest state in the Union, home to a vibrant entrepreneurial culture, could come up with was a 10% across-the-board cut?

And as the crisis develops, how long will that entrepreneurial culture continue to call California home? Don't get me wrong, I am not anti-Cali. What I am is disgusted with the lack of willingness to make the hard choices, to sacrifice short term for a long-term gain, to shake out of the "I want it, therefore I should have it" mentality that is at the root of the budget crisis. And if the bright minds in California can't bring themselves to nut up and face facts, where does that leave the other states that typically follow California's lead?

And, in the meantime, in the dark underbelly of SoCal, the seeds of ethnic conflict continue to germinate.

LA Gang Accused of Targeting Blacks
By Thomas Watkins
Dec 30, 2007

LOS ANGELES (AP) — In a murderous quest aimed at "cleansing" their turf of snitches and rival gangsters, members of one of Los Angeles County's most vicious Latino gangs sometimes killed people just because of their race, an investigation found.

There were even instances in which Florencia 13 leaders ordered killings of black gangsters and then, when the intended victim couldn't be located, said "Well, shoot any black you see," Los Angeles County Sheriff Lee Baca said.

"In certain cases some murders were just purely motivated on killing a black person," Baca said.

Authorities say there were 20 murders among more than 80 shootings documented during the gang's rampage in the hardscrabble Florence-Firestone neighborhood, exceptional even in an area where gang violence has been commonplace for decades. They don't specify the time frame or how many of the killings were racial.

Thursday, January 10, 2008

More Violence in Pakistan

The symbols of the state (military, police, representative government) in Pakistan are taking it on the chin these days.

Suicide attack on Pakistani police; 22 dead
By Mubasher Bukhari

LAHORE, Pakistan (Reuters) - A suicide bomb attack killed at least 22 people, most of them policemen, in Pakistan on Thursday, deepening a sense of insecurity weeks before elections that could weaken President Pervez Musharraf's grip on power.

The suicide bomber walked up to policemen outside the High Court in the eastern city of Lahore, who had gathered outside the court ahead of a protest rally by lawyers, and blew himself up.

All but two of the 22 dead were policemen, said a doctor at the city's main hospital. About 60 people were wounded...

Damn. Click here for blog posts on Pakistan. This is getting uglier and uglier.

More Perils of Urban Conflict

Not a new concept, but one that Al Qaeda was unfortunately able to execute on:

Blast Kills 6 as Troops Hunt Iraqi Insurgents
U.S. Forces Encounter Booby-Trapped House

By Amit R. Paley and Joshua Partlow, Washington Post Foreign Service
Thursday, January 10, 2008

FORWARD OPERATING BASE NORMANDY, Iraq, Jan. 10 -- The explosion of a booby-trapped house killed six American soldiers on Wednesday during an offensive against Sunni insurgents in Diyala province, making it the deadliest day for U.S. troops in Iraq since November.

The blast, which also killed an Iraqi interpreter and injured four U.S. soldiers, took place on the second day of an unusually large campaign in Diyala against the insurgent group al-Qaeda in Iraq. Three U.S. troops were shot to death Tuesday in the neighboring northern province of Salahuddin...

Another Nail in the Coffin

Check out this Matt Simmons' white paper on Peak Oil. You might want to download it an read it at your leisure.

Another Nail in the Coffin of the Case Against Peak Oil
By Matthew R. Simmons
November 16, 2007

As oil prices rise, the debate about “Peak Oil” rages on. Optimists, who are still probably the majority of “oil pundits”, argue “No… least not for decades.” They base this belief on various widely-held convictions including the magnitude of the world’s energy resource endowment, the ability of technology to recover greater amounts of oil once left behind, the lag time between high oil prices and ramped up drilling they stimulate, the remarkable amount of unconventional oil now commercial through high prices and unspecified ”technology advancements.”

Wednesday, January 9, 2008

Time Binding

Korzybski's concept of "time binding" - taking concepts and freezing them for future use via symbols (books, music recordings, and, in this case, YouTube) can be a pain the ass for those who want to shape mass opinions.

Tom "I'm the Smartest Guy Here" Adkins is probably wishing he had a Memory Hole of his very own that he could start stuffing things in. How in the world does Peter Schiff do these shows without his head exploding in the yawning vacuum of incompetence formed by his fellow "experts"?

Tuesday, January 8, 2008

Dead Are The Peacemakers

Another setback for those trying to cobble together some sort of plan to stabilize Pakistan.

Tribal killings shatter hopes for ceasefire
by Jeremy Page, TimesOnline

Suspected Islamist militants shot dead eight tribal leaders in coordinated attacks just hours before they were due to discuss a planned ceasefire between Pakistan’s security forces and al-Qaeda and Taleban insurgents near the border with Afghanistan.

The killings took place yesterday morning and on Sunday night in the mountainous region of South Waziristan, home to Baitullah Mehsud, the Pakistani Taleban leader who has been blamed by the Government for the assassination of Benazir Bhutto last month...

Here's hoping this is not a pre-emptive measure to kill off the peacemakers in advance of a more spectacular attack, much like Al-Qaeda achieved when they whacked Ahmed Shah Massoud on September 9, 2001.

Iran WarKerfluffle

You have by now read various versions those mean Iranians in their speedboats "harassing" U.S. Navy ships in the Straits of Hormuz.

This is one of those stories that, when you dig more deeply into it, has several layers of nuance that don't make it into the initial, breathless reports that are fed into the global mediastream.

Stratfor has an analysis of the incident and some conclusions worth considering:

Geopolitical Diary: The Rise and Fall of the 'Strait of Hormuz Incident'

...The U.S. Navy 5th Fleet in Bahrain later issued a press release that said five small speedboats — suspected of being manned by Iran’s Islamic Revolutionary Guard Corps Navy (IRGCN) — confronted the U.S. warships and engaged in aggressive behavior, but the report did not comment on the purported radio threat or the white boxes.

It now appears that the initial reports of this peculiar incident were inflated — erhaps intentionally — to make the episode appear to be a bigger provocation than it actually was...

...It’s still difficult to say what actually happened Sunday morning, but it’s even more difficult to imagine Iran seeking out a military confrontation with the United States in such an amateurish and awkward manner. Moreover, the same day of the ship encounter, an Iranian Foreign Ministry spokesman said that Iran is awaiting a U.S. response to Tehran’s preconditions for holding new talks over the security situation in Iraq. Iran could hardly expect Washington to be in the mood to negotiate after having three U.S. warships directly threatened by an IRGCN unit. A lot doesn’t add up, but now that both Tehran and Washington have taken action to defuse the situation, an opportunity is open for both sides to end the current impasse and get to talking again...

One wonders what exactly has been going on behind the scenes between different factions within both the U.S. Administration and the Iranian governing circles - with various groups jockeying for positions that range from outright military confrontation to a desire for a grand bargain.

I canceled the official FutureJacked Iran WarWatch back in early December, mainly because I now believe that the time is right for a big diplomatic move and I think that the Bush 43 Administration, as much as I might disagree with its policies in some areas, will push to resolve it diplomatically, as they have with the Libyans and are pressing to do with the North Koreans.

If nothing else, this incident reminds us to be wary of initial reports we read in the mediastream - those are often crafted to guide our thinking down pre-dug channels prepared by those Information Ops types out there.

Monday, January 7, 2008

Suddenly, It's a Bleak Winter

The folks at Elliott Wave International have allowed me to reproduce another article that deals with the ongoing problems with credit, lending and the housing markets. The article includes a link to an excerpt from recent Elliott Wave Theorist where you can read a review of Federal Reserve options to deal with the ongoing solvency crisis (as opposed to the liquidity crisis that they've been able to address through the Discount Window). It's definitely worth clicking over to (note - you do have to go through a free registration process).

Enjoy. If nothing else, the analysts at EWI are putting out material that you won't find anywhere else:

Suddenly, It's a Bleak Midwinter for Housing and Lending
By Susan C. Walker, Elliott Wave International
January 7, 2008

In the bleak midwinter,
Frosty wind made moan,
Earth stood hard as iron,
Water like a stone…
(From "A Christmas Carol" by Christina Rossetti)

Shawn Colvin sings a beautiful song based on this poem by Christina Rossetti, reminding us of the bleakness of midwinter. That is exactly where the housing market seems to be now – facing its very own bleak midwinter of falling prices, rising mortgage rates and growing inventories.

The latest report of the S&P/Case-Shiller home price index shows that the price of houses fell 6.7% in October, year over year. That is the largest year-to-year decline drop since April 1991. Think of it – if you had bought a home for $300,000 in October 2006, it is now worth about $280,000. And suppose you just got a new job and need to move? You are going to have trouble selling it at that price, too, thanks to so many foreclosed homes on the market. One realtor in Phoenix explained to a Wall Street Journal reporter that local residents are now competing with foreclosed homes selling for $50,000 to $100,000 less than other houses on the market. "The sellers now are having to reduce their prices by 20% to 30% to compete," she says. (Wall Street Journal, "Pace of Decline in Home Prices Sets a Record," 12/27/07)

At a meeting of the New York Society of Security Analysts on January 7, U.S. Treasury Secretary Hank Paulson said this about the U.S. economy: "We will likely have further indications of slower growth in the weeks and months ahead.''

Paulson and central bankers at the U.S. Federal Reserve recognize that they, too, face their own bleak financial midwinter. It's not just the mayhem brought on by the subprime mortgage debacle, the implosion of the housing market and the ensuing credit crunch; nor is it that the U.S. economy lurches toward a recession and hard times.

No, it is something bigger than that. Public opinion or social mood, as we call it here at Elliott Wave International, has shifted from positive to negative. When that happens, financial heroes find themselves falling from their pedestals onto frozen earth hard as iron.

Exhibit A - The headline of a recent article on Bloomberg: "Paulson Gets Diminishing Return with Bush, Like Powell, O'Neill" and the lead: "Henry Paulson escaped the Nixon White House with his reputation enhanced. He won't be so lucky this time around."

Exhibit B - The lead from a recent column by David Ignatius in the Washington Post:

"When airport rescue crews are worried that a damaged plane may have a crash landing, they sometimes spread the runway with foam to reduce the probability of fire on impact. That's what the Federal Reserve and other central banks are doing in pumping liquidity into severely damaged financial markets. Make no mistake: The central bankers' announcement Wednesday of a new coordinated effort to pump cash into the global financial system is a sign of their nervousness…."

Nervousness is in the air now. Investors are anxious about the markets; everyone is worried about the housing market. Our Elliott Wave Financial Forecast December issue explains how housing starts (and stops) are intimately tied to recessions: "One key indicator of success in pre-dating economic downturns is housing starts, which are approaching the 1-million-a-month level that has preceded all recessions of the last 40 years."

And the Fed is nervous, too. So much so that it announced a credit giveaway with four other major central banks (the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank) in mid-December to try to bolster the financial system and the banks that keep it humming. The Fed reports that banks have been stepping up to its auction window each week to purchase $20 billion. Unfortunately for the banks, most of this "liquidity" isn't that liquid. It has to be paid back within 30 days, with interest of about 4.65%.

Editor's note: Elliott Wave International has agreed to make available to our readers a 2-1/2-page excerpt from Bob Prechter's Elliott Wave Theorist in which he describes exactly how the Fed's latest effort to shore up banks' balance sheets has become "High Noon for the Fed's Credibility." Click here to read the Theorist excerpt.

Just how bleak is the future for central bankers if this recently implemented plan doesn't work? Bob Prechter explains in his just-published Theorist:

"Nevertheless, this is probably the single most important central-bank pronouncement yet. But it is not significant for the reasons people think. By far most people take such pronouncements at face value, presume that what the authorities promise will happen and reason from there. But the tremendous significance of this seismic engagement of the monetary jawbone is that if this announcement fails to restore confidence, central bankers' credibility will evaporate."

"At least that's the way historians will play it. But of course, the true causality, as elucidated by socionomics, is that an evaporation of confidence will make the central bankers' plans fail. The outcome is predicated on psychology."

The "socionomics" Prechter refers to is a new social science he has introduced that studies how humans behave in groups within contexts of uncertainty – where fluctuations in social mood motivate social actions. It explains that rather than an event happening that affects social mood (for example, falling home prices make people feel bad), what really happens is that social mood changes first from positive to negative and then lousy things happen (for example, unhappy people make home prices fall). If you can adopt this point of view, then you can see that, in poetic terms, we are fast approaching a bleak midwinter for the economy and the financial markets.

Susan C. Walker writes for Elliott Wave International, a market forecasting and technical analysis company. She has been an associate editor with Inc. magazine, a newspaper writer and editor, an investor relations executive and a speechwriter for the Federal Reserve Bank of Atlanta. Her columns also appear regularly on

And Yet Even More Small Nuclear

Check out Adams Atomic Engines, Inc. Outstanding design and concept. Again, this is the sort of "neglected tech" that will provide options in a world that has to rethink its power infrastructure. Also, for those of you who like to follow events in the nuclear world, check out Rod Adams' blog at Atomic Insights (a must-read, along with NEI Nuclear Notes and Idaho Samizdat for the power and DOE side of nuclear issues in the U.S.)

And be sure to check out the FutureJacked Top Ten Nuclear Stories for 2007 if you haven't already.

Knowledge - Curse versus Springboard

Check out Zenpundit's post on "Knowledge Expertise as a Springboard instead of a Cage". There is a lot of great stuff there that ties together one of the themes of this blog and of Catastrophic Abundance - how will the "cognitive elites" handle a radically changed political, economic and social futurescape?

Special Ops in Pakistan?

For those interested in the boiling stew of potential sectarian and ethnic conflict in Pakistan, check out a new post over at Wired's Danger Room:

Uh, Oh: U.S. Special Forces May Head to Pakistan

...Now if this was going to be a low-key, under-the-radar affair like our work in the the Horn of Africa or the excellent program in Mindinao in the Southern Philippines, Charlie would be on board.

But there are two conditions that support those operations that simply are not present in Pakistan.

1) A welcoming and cooperative government, whose armed forces take the lead in ground operations.

2) Little in the way of media coverage or Pentagon/Foggy Bottom meddling.

Unfortunately, there will be meddling a-plenty, and the 10,000 mile screwdriver will be in full effect in Pakistan, no matter how covert the program wants to be. There was a time where aggressive, kinetic counter-terrorism operations in Pakistan could have been effective. We've long since past it. Which is exactly why Musharraf might let us in now. We'll go ahead and add Pakistan's tribal areas and Northwest frontier to our ever-growing list of "too little, too late..."

Click here for previous FutureJacked articles on Pakistan.

Saturday, January 5, 2008

Socionomics and Populism

If we really are headed into a downturn, socionomic theory tells us to expect populists/demagogues to rise to the fore.

Political blogger Dave Winer has expressed it perfectly when he states:
A lot of my friends on Twitter dismiss Huckabee, and to be clear, I could not vote for a Republican this year, no matter who their candidate is, but he is a fantastic American personality. Elections are all about feelings, not policies or positions or even records as the pundits insist. Who you vote for is a function of how you feel about the country and the world in relation to yourself. The candidate who comes closest to validating your feelings is the person you vote for. I think we'll tire of Obama quickly, and we're already tired of Hillary. I think the rational choice for each party, although many disagree, is Edwards and Huckabee because each of them tap into the well of frustration Americans feel about everything.

Straight from the pages of The Wave Principle of Human Behavior. I'd be reading up on my Kingfish biographies if I were you.

Hat tip to John Robb for the link.

Friday, January 4, 2008

UNOSAT over Kenya

With violence threatening to spin out of control in Kenya, the U.N. is leveraging satellite technology to help map out burned villages. Lot's of applications here for future conflicts.

Hat tip to the Danger Room for the link.

Nuclear Fact Struggle

On January 2nd, one of my favorite newsletters published an anti-nuclear power screed by three contributing writers. Whiskey and Gunpowder sent out an article entitled Power Struggle, authored by Jerry B. Brown, Ph.D., Rinaldo S. Brutoco, J.D., James A. Cusumano, Ph.D.

Unfortunately, I only have a couple of bachelors degrees - in history and nuclear engineering - but even with no initials to string behind my name, I'd like to take issue with the struggles that Messrs. Brown, Brutoco and Cusumano are having with the facts in their article on nuclear power.

First, any of us who have looked at the United States' energy portfolio knows that nuclear power is not without its costs or issues - but no source of power is, including hydroelectric, solar, tidal, coal, natural gas, landfill methane gas plants or pedal power. Second, I strongly support all manner of work in alternative energy sources. The United States, along with the rest of the developed and developing world, is going to need a diverse mix of base and peak load energy alternatives in the coming decades.

With that in mind, let's address some selected points of the "argument" proposed by Messrs. Brown & Co. against using nuclear fission to generate the steam for power plants as part of the energy mix in the coming decades.

"Like a cat with nine lives (and endless government subsidies), the nuclear industry is being marketed worldwide by a ubiquitous public relations campaign funded by a handful of companies who stand to gain tens of billions if they can talk an appropriately cautious public into buying this ill-fated technology."

First off, the nuclear power industry is the only major producer of electricity that is forced to take into consideration the waste portion of their fuel cycle when costs are added up for the power generation (the fumes and stinks released by natural gas and coal plants get to be ignored as long as the stacks meet regulatory approvals for emissions - they are not forced to count as liability the secondary effects generated by their emissions (increased incidents of asthma, mercury releases from fly ash, etc.) and don't even get me started on the fact that the solar power people don't have to consider the disposal of the battery systems (often lead-acid) that go along with their power generation).

Nuclear power plants are forced by law pay into a fund set up by the federal government at a rate of 1 mill per kilowatt-hour to pay to have the used fuel disposed of (we'll talk more about that in a moment). The power companies have paid, but thanks to the anti-nukes, the stoarge facility never got built. You will note, though, that solar panel manufacturers don't pay into a lead disposal fund. Coal-fired plants don't pay into a fund for asthma victims.

Critics of nuclear power point to the recent energy bill that included loan guarantees and subsidies for electricity generated by new nuclear plants. They fail to mention a few things - one, loan guarantees do not impose a direct cost on the taxpayer and two, the one true subsidy in the recent energy bill is only for the first 6000 MW(e) of new generating capacity brought online. That subsidy is ONLY for new construction. This means that the federal government will give a credit to utilities, but only for the first 5 or so plants built. After that, if the nuclear industry still can't produce of cost-effective power plant, then they taxpayers risk is limited and nuclear power plant makers have had their chance. The nuclear utilties do benefit from subsidies, but compared to the everlasting subsidies given to wind, solar, petroleum and other alternative energies (especially ethanol), nuclear stands up quite well.

"When President Nixon declared Project Energy Independence in 1973 during the first Arab oil boycotts, he promised an ambitious nuclear power program that would lead to 1,000 reactors deployed across the nation by the end of the 20th century. Only 104 commercial reactors are in operation within the U.S. today. Of these, 48 have already been granted license extensions that are typically for 20 years beyond their original "useful life" cycle, and utilities have already filed or plan to request extensions for another 33 plants."

And if we'd built those 1,000 plants, the United States would today be in the same position as France - closer to 80% of our electricity generated by zero-emission nuclear power and the transition to an all-electric transportation fleet would be a possibility as we deal with Peak Oil. Instead, nuclear only generates ~20% of US power (widely varies per state).

Oh yes, and while we are at it, we could discuss the fact that nuclear power is online 90% of the time (it has what is called a 90% capacity factor). So for a 1000 MW(e) plant, you can expect 900 MW(e) from it when you average it over a year. For solar, you get capacity factors of maybe 17%, but let's call it 20% to be nice, so for 1000 MW(e) of installed solar, you get 200 MW(e) out of it. Wind clocks in at maybe 30% for great sites and even coal is only around 70%. Nuclear is there, all the time, generating electricity at production rates as cheap as coal.

"The Nuclear Regulatory Commission claimed that the plants were safe, and the risk of a catastrophic accident was too slim to calculate. Yet as early as 1970, the Three Mile Island reactor safety systems failed, and the plant came within 30 minutes of a meltdown, leading to an evacuation of the area around the plant."

The NRC never claimed that the risks were too slim to calculate. Please note that Messrs. Brown & Co. never cite a source to prove their assertion. Typical. Makes you wonder how they got their PhD's and JD.

Three Mile Island Unit Two partial meltdown was definitely a financial and infrastrucutre disaster - but even with the many things that went wrong at this early second-generation power station, not one single person was injured or even exposed to radiation in excess of regulations. Three Mile Island led to the loss of a major plant and exposed engineering flaws in the reactor design.

Guess what, I hate to break it to all the liberal arts majors out there, but designing, building, testing and running a massive installation based on technology only a few decades old is not easy and is not always perfect. Shutting down nuclear power due to the accident at Three Mile Island Unit Two would be like never developing coal-fired boilers or steam technology because the pressure vessels kept exploding on the steam-powered machinery that powered the industrial revolution in the 1800's (oh, and by the way, killing untolds thousands if not more in the process of developing the technology - civilian nuclear power in the US has never killed one single man or woman). The after-effects of TMI-2 led to a massive overhaul of the industry and safety upgrades that make nuclear power the safest and most efficient type of electricity generation in the U.S. I keep referring to TMI-2, because Three Mile Island Unit One is one of the best plants in the US fleet and has been providing power for decades, reliably, on the same site at TMI-2.

"In 1986, multiple explosions at the Chernobyl reactor in the former Soviet Union blew off the reactor containment lid, spewing more than half of the radioactive materials thousands of feet into the air, so that the radioactive isotopes circled the Northern Hemisphere. The area around Chernobyl has been declared a "dead zone," and radioactive vegetables are still showing up in the Ukrainian markets today. While the death toll can be disputed, it has been estimated as high as 60,000 and still growing."

So much of the above claim is only suitable for fertilizing lawns that I will only give a summary. First off the RBMK reactor at Chernobyl was a horribly-engineered reactor design. Even so, it still functioned reasonably well until politically-motivated decisions by a communist party hack that had been given a job there led to the disaster.

Also, Messrs. Brown & Co. state that the explosion blew off the "containment lid" - that is a lie. The explosion blew off a confinement lid - what may seem like mere semantics is actually a critical point. All western reactors have a containment structure (the big dome or concrete box typically seen at most plants) which is meant to survive major damage and keep all the radioactive material inside in the event of a destruction of the pressure vessel. Confinement only means that there are engineered barriers to avoiding release of radioactive materials and those can fail.

The lies continue - Chernobyl is not a "dead zone" - it is certainly a zone of high radioactivity, but, paradoxically, it is also a zone of flourishing wildlife (and the subject of much dispute by those who continue to insist that it can't be true and those who study it and produce studies based on observation and data - click here for more). Also, please cite the source for the 60,000 dead figure. The most recent IAEA study (click here to access it) pegs the number closer to 4,000, but again, they rely on pesky things like facts and science when you've got a PhD behind your name.

As for the radioisotopes circling the globe as a result of the accident - they are correct. Of course, they neglect to mention that, outside of the immediate area around Chernobyl, if you were to eat two or three bananas, you would be dosing yourself with as much, if not more, radioactive material than is typically received due to the releases from Chernobyl (from the naturally radioactive potassium in the banana).

"The government promised that there would be a long-term solution for the storage of high-level radioactive waste, primarily from spent fuel rods. As of November 2006, the Department of Energy's proposed long-term waste depository at Yucca Mountain, Nevada, is mired in scientific controversy, legal challenges and a growing admission by all concerned that it won't prove large enough to contain the waste being created by existing reactors — let alone deal with the radioactive waste from new ones."

This is where the anti-nuclear folks really shine. They oppose nuclear power. They file untold lawsuits to raise costs and cause delays. Then, when utilities are faced with raised costs and delays - the anti-nuclear folks say "I told you it was too expensive and would be delayed." They also oppose rational storage options through lawsuits. Then, when the rational storage options are delayed due to their opposition, they say "look, waste disposal is a horrible problem". Used nuclear fuel rods are still 90% useful. Societies with rational energy policies such as the UK, France, Japan and Russia recycle their used nuclear fuel rods and are left with much-reduced waste forms. Jimmy Carter killed recycling in the US back in the late 1970's and did it with no storage site as an alternative. We can handle nuclear waste. It is a political issue, not a technical one.

"The industry should also be required to publicly calculate the cost per kilowatt-hour of electricity from a new nuclear plant, including all subsidies; the full cost of all waste disposal for a 10,000-year period, with such waste required to be kept out of the biosphere; and the full cost of "entombing" or decommissioning the reactor. Should such a calculation be made, it would reveal the true cost of nuclear energy as many times more expensive than existing, commercially available renewable sources."

Here is where we end on agreement. I have no problems with that. However, I also insist that every other source of power - be it coal, hydropower, natural gas, solar, etc. be forced to do the same thing. Nuclear already does what Messr Brown & Co. ask - how about everyone else being forced to do the same?

Sorry for the long post, but the energy debate is too important to clutter up with distortions and half-truths. Nuclear power is not a panacea, but it is an outstanding candidate for a significant portion of U.S. electricity production in a world of depleting fossil fuels.

A Weimar Debit Card?

I count myself as in the camp of those expecting a severe, if probably short, bout of deflation in the U.S. once the solvency crisis currently affecting financial collosi such as Citigroup begins to make itself felt in the broader economy.

That said, a recent thread over in a Life After The Oil Crash forum (yes, I know, but it is fun to watch what the bleeding edge of doomthink evolve) focused on the issue that most mainstream pundits and economists expect hyperinflation. The question was - how might hyperinflation actually occur, even though the rotten foundation of the fractional reserve banking system seems to scream deflation?

One of the possibilities I trotted out was that Congress could change the laws governing the Federal Reserve and authorize the Fed to open accounts for every U.S. taxpayer and drop in $10,000 or even $100,000 or hell, a $1,000,000 in each account (it's only electronic digits, why limit yourself?) if a solvency crisis swept through the country. These debit cards could be set up to where you could not draw cash from them and there would probably be limits on their use, much like the debit cards issued for various welfare programs are limited to food but exclude liquor and ammo. The Powers That Be would probably have to limit their use in paying down debt, because that would be deflationary (eroding the asset base of those counting on the income stream over time). It would probably lead to serious to severe inflation in goods, but I am not sure if that would translate over to higher wages (at least, wages rising fast enough to keep up, since the "money" was created out of thin air, not from production).

I would regard this as an action of last resort, only to be turned to after a major deflation, but I guess the Fed could get a head of the curve.

The reason I bring it up is that the Social Security Administration is going to issue debit cards to their recipients who don't have bank accounts and it got me to thinking (always a dangerous thing).

Treasury Plans Social Security Debit Card
By Eleanor Laise, Wall Street Journal
January 4, 2008

The Treasury Department plans to introduce a prepaid debit card for Social Security recipients in an effort to provide safer and cheaper benefits payments.

The Direct Express debit card, set to be announced today, will be introduced in a handful of states this spring and rolled out nationwide by the end of the summer. Dallas-based Comerica Inc.'s Comerica Bank has been selected as the card issuer for the program, which is targeted at Social Security and Supplemental Security Income recipients who don't have a bank account.

Once the infrastructure is in place for Social Security recipients, such a program could be scaled up (with usual government efficiency, of course) to a much broader number of recipients in the future.

Something to think about, if nothing else, when we start hearing about the many programs that will be trotted out to "save" the middle class (by wiping it out through hyperinflation...)

Thursday, January 3, 2008

More Positive Nuclear News

Mitsubishi Heavy has joined the ranks of nuclear reactor designers who have submitted reactors for design certification by the NRC.

This continues the string of mostly good news for the nuclear power industry over the last year (see the The Top 10 Nuclear Stories for 2007 for more details). This design has a mammoth 1,700 MW(e) output and will probably be favored by utilities with a regional grid in good shape and lot's of other baseload options to handle the brief refueling outages.

Here's hoping the credit picture remains stable enough to fund major infrastructure projects. If that happens, then you can expect the future to be so bright for us nuke types, we'll have to wear shades...

Wednesday, January 2, 2008

The Reframing Crisis

As we touched on in The Positives of GlobalGuerrilla Groups and the Coming 4GW Devolution, there will be some silver linings in the storm clouds approaching - though we still need to be ready to dodge the thunder and lightning of Fourth Generation Warfare and the trend towards devolved, primary loyalties.

The Reframing Crisis

When trying to come up with a list of further potential positives, it occurred to me that much of what we face is a "Reframing Crisis".

In a future where all of the large-scale systems of control and comfort are stressed, much of the "positives" in this boil down to the challenge to individuals and communities to face reality, take responsibility and, frankly, suck it up and find the good in challenging times. I hate to trot out an old bromide, but when the world gives you lemons, time to make some lemonade. The potential problem lies in the fact that many folks will sit around waiting for someone to pour their lemonade for them. And when someone does finally come along, they may not like the taste of it...

There will always be opportunities for success for the prepared mind and the individual ready to act. These opportunities may not be what is currently defined as success.

In a world where access to credit is extremely restricted, where energy inputs are expensive and not in reliable supply (for everything from earth-movers to transportation of goods to batteries for your iPod), then one version of material success may change from that of real estate developer to that of urban reclamation specialist - someone who can organize a team of laborers, tear down, refit or upgrade existing structures that serve no purpose in a world without cheap fossil fuels and massive government tax breaks.

Success may be in being a key member of your family's business interests instead of splitting away from your family to start your own hedge fund.

Or, success may lie down a road filled with military training, "neighborhood watch" groups or private security firms - all tied back to your community, your clan or your immediate family.

One advantage to the prepared mind (as we covered in Catastrophic Abundance) will have in this new era is that the vast majority will no be able to change their mental "software" to cope with the new circumstances. Many will expect that the old nation-state forms of support such as committess, welfare programs, refugee camps, tax breaks, etc. will help them in this time of trial. If the combination of credit crisis, technology-aided devolution of economic and communication structures and bankrupt governments gets as bad as I project, then the folks waiting around to be saved will be left waiting.

That said, those of active spirit who are ready to seize the day, generate material wealth and build new social patterns up during the Coming Chaos will face a terrible dilemma at some point as society gives birth to whatever comes next...

The Chump Phase

"Behind every great fortune is a great crime..." - Mario Puzo

This coming transition, where social space will alternatively be constricted (less physical movement for the masses) and broadened through technology (via cheap-to-free social networking software that continues to penetrate many levels of business and personal interaction) will present many opportunities to the few willing to take risks. That said, those that benefit from the current structure will not look kindly upon the destruction of their gravy train of federal subsidies and contracts, of transfer payments and regulation-imposed barriers to entry by newcomers to the economic scene. They get to write the rules. They get to define what is criminal - remember that.

I have grown up in an era where I was taught to trust the cops and the judge, to respect the laws. If things change as much as I expect, the moral component of the law may be weakened. The powers that be will do all they can to legislate order and stability. That might have worked when trying to shut down entrepreneurs who chose to trade in "illegal" drugs or pirate movies and CDs. But will it work in a world where the police are underpaid or even unpaid? Will this moral component - one of the most effective tools law enforcement has - be lost in a haze of corruption? And what will the response by the elites be? Fewer laws or more? You take a guess...

Those that will want to build new forms of material success will face a legal structure not ready for their revolution.

For example, in a world where many former home "owners" are ousted, you can expect squatting to become a major problem. The first waves will result in crackdowns on the squatters as part of a property rights campaign. In the end, this may change - much as the laws had to be changed on the Western Frontier of the early American Republic when faced with that exact same problem - allowing title to men and women who staked out claims and improved the property. The first ones, the ambitious ones, will rot in privatized jails, working for pennies per hour...

Something to think about and another reason to plug deeply into your community.

An Existing Architecture to Fall Back On

One incredibly positive aspect of this coming time of transition, at least for the United States, is that we have an existing framework to fall back on.

It is the U.S. Constitution.

The Constitution is not a perfect document by any means. That said, it is a document quite suited to a world where fiat money has failed (the Constitution actually requires U.S. money to be of gold or silver - this has been miracled away by a Supreme Court decision) and credit is dear, a hard-money requirement would be an asset, not a liability - once the debt crisis was worked out. Also, the Constitution allows for great flexibility among the several states, giving some the chance to try solutions that others would avoid and thereby allowing multiple, custom solutions to many problems while still allowing for a united front in world affairs.

Final Thoughts

I apologize for some of the rambling above, but the coming changes, whether they happen slowly or in a rush, are going to challenge the population of the U.S. and the world in many ways. That said, challenges great and small have been faced by societies throughout history. We are looking at a reversal of a trend that, in all reality, is not even 400 years old (going from the Treaty of Westphalia as many 4GW theorists use - it is as good a marker as any). This will, like all major social changes, result in winners and losers.

Prepare your mind and you may just avoid being on the losing end - something your children and your children's children will praise you for in years to come.

Adjective-Challenged Media

As 2007 stumbled to a close, I could at least count one blessing. The Sunni tribals and "Saddamites" were cutting deals with U.S. forces, so finally, I wouldn't have to hear or read about "restive Anbar province". Every time an IED lit off, "restive" was the adjective of choice. I guess the reporters didn't have a thesaurus anywhere in the Green Zone. Mercifully, I thought I'd seen the last of that overused adjective.

Then, MSNBC came along to prove me wrong.

Female suicide bomber kills 10 in Iraq's Baquba
8 wounded when attacker struck neighborhood patrol volunteer checkpoint

BAGHDAD - A female suicide bomber wearing an explosive vest struck a checkpoint of neighborhood patrol volunteers in Baquba, capital of Iraq's restive Diyala province, killing 10 people and wounding eight, police said.

Come on, please find a new, worthless adjective to use.

Jeff Vail's Crystal Ball

Check out analyst Jeff Vail's thoughts for the coming year in 2008: Pause.

Missouri 38 Arkansas 7

Photo by Nick King, Columbia Tribune

What a way to start 2008.