[QUOTE=ewmayer;249965]

--------------------------

For our U.S. readership (and you gol-durn furriners are welcome to read it, too), here is a take on the President`s "I am America, and So Can You!" truthiness and hopefultude-filled State of the Union address by - of all people - a former Goldman Sachs exec - which aligns fairly closely with my own "get real, dude" take:

[URL="http://www.zerohedge.com/article/former-goldman-insiders-take-obamas-speech-and-america"]Former Goldman Insider's Take On Obama's Speech And The Massive Pink Elephant In The Room[/URL][/QUOTE]

Interesting take.

But back to the issue of defining money and its units ...

In another I forum I posed the question: Aren't we (the US) really
back on a de facto gold standard? I'll repose this same question here.

[QUOTE=davar55;250008]But back to the issue of defining money and its units ...

In another I forum I posed the question: Aren't we (the US) really
back on a de facto gold standard? I'll repose this same question here.[/QUOTE]

Not as long as we can continue to issue money backed by nothing more than a promise.

------------------------

Another excellent critique of the president`s SotU address is by former S&L regulator Bill Black:

[url=http://www.ritholtz.com/blog/2011/01/what-is-president-obamas-sputnik-moment-and-what-is-his-apollo-response/]What Is President Obama’s Sputnik Moment and What Is His Apollo Response?[/url]
[quote]The Soviet Union launched Sputnik on October 4, 1957 during President Eisenhower’s administration. President Kennedy launched the American response that led to the Apollo program and the “Space Race.” President Obama used these three space-related terms as metaphors forming the centerpiece of his State of the Union address:
[i]
This is our generation’s Sputnik moment.We’re issuing a challenge. We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo Projects of our time. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race.
[/i]
What “this” is Obama referring to when he says “This is our generation’s Sputnik moment”? (And whose generation is “our” generation?) Sputnik was a “moment” — its launch was a sensation. It caused Americans to engage in a massive reappraisal of U.S. policy and leadership. Sputnik made clear a potential Soviet threat to American’s lives. The Soviet Union first tested a hydrogen bomb in 1953. By 1957, the Soviets had the rocket technology to put Sputnik in orbit. It was clear that they would soon have the capability of attacking any American city with a hydrogen bomb — and that the U.S. had no means of stopping such an attack. Sputnik was an enormously big deal because every American understood the unprecedented threat to our survival.
...
Asking what “this” Obama was referring to when he raised the Sputnik moment metaphor leads us to the missing “why” in the centerpiece of Obama’s address. Why are we going to “fund the Apollo Projects of our time?” Here’s the full context Obama provided:
[i]
Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology — an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.
[/i]
[u]Senator[/u] Obama had a position on climate change:
[i]
Global warming is real, is happening now and is the result of human activities. Barack Obama and Joe Biden believe we have a moral, environmental, economic and security imperative to tackle climate change in a serious, sustainable manner.
Reduce Carbon Emissions 80 Percent by 2050: Barack Obama and Joe Biden support implementation of a market-based cap-and-trade system to reduce carbon emissions by the amount scientists say is necessary: 80 percent below 1990 levels by 2050. They will start reducing emissions immediately in his administration by establishing strong annual reduction targets, and they will also implement a mandate of reducing emissions to 1990 levels by 2020.
[/i]
[u]Senator[/u] Obama, in a speech commenting on President Bush’s 2006 State of the Union address, had a position on energy independence:
[i]
“Focus your operations on oil, especially in Iraq and the Gulf area, since this will cause them to die off [on their own].” These are the words Osama bin Laden. More than anything else, these comments represent a realization of American weakness shared by the rest of the world. It’s a realization that for all of our military might and economic dominance, the Achilles heel of the most powerful country on Earth is the oil we cannot live without.
[/i]
[u]President[/u] Obama never even attempted to explain why his space metaphors were apt. If energy dependence on the Mideast and climate change pose an existential threat to the U.S. — as Senator Obama believed and argued — then President Obama needs to make the most powerful case possible to convince the American people of the need to spend over $100 billion in additional federal funds to support development in renewable fuels. Instead, President Obama’s mention of these matters in his address was so cursory and opaque (“an investment that will strengthen our security [and] protect our planet”) that he seemed almost embarrassed to even raise the dangers that Senator Obama warned endangered our nation and world.

But assume that Obama is right that climate change and our energy dependence pose existential threats to Americans analogous to the Soviet missile technology revealed by Sputnik and that the correct metaphor for how we should respond is with a program equivalent to Apollo to develop domestic, renewable energy sources to counter these threats to our nation. (I think that Obama could make a compelling case for each of these assumptions.) Why does Obama not propose an Apollo program? Obama’s description of President Kennedy’s response to Sputnik is positive, but incomplete and misleading.

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.[/quote]
[continued below - it's good enough that I found it hard to chop down to 1-post size]

[continued]
[quote]One of my summer jobs was at NASA’s Goddard Space Flight Center in their technology applications lab. I love physics and space exploration. One caution I would make is that “the science [was] there” — the problems of taking astronauts to the moon and returning them were daunting, but they were overwhelmingly engineering challenges. We need engineers every bit as much as we need scientists. The more fundamental point is that Obama doesn’t seem to get the fact that NASA was and is a government agency and that it led our successful space program to the moon (and many other programs that produced greater scientific and military advances than did Apollo). Instead of creating a similar governmental effort, Obama describes his plan as:
[i]
We’re issuing a challenge. We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo Projects of our time.
[/i]
So, there’s to be no national plan. No one is in charge. If “they” “assemble teams” which “focus on the hardest problems in clean energy” “we’ll fund the Apollo Projects of our time.” I was first formally taught management principles by NASA. NASA took management very seriously. When you are engaged in complex engineering projects the order in which you do things is critically important. Yes, you can approach some things in parallel, but Brownian motion does not a project make, much less the equivalent of Mercury, Gemini, and Apollo combined. A significant increase in scientific and engineering research about renewable energy may be a good thing, but every research project could be successful and we could still end up without competitive renewable energy sources if we do not have a coherent overall plan.

Obama seems to think that government cannot succeed and cannot lead, even as he uses metaphors about government success.
[i]
Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS. Just think of all the good jobs – from manufacturing to retail — that have come from those breakthroughs.
[/i]
Actually, government, non-profits, and private firms have long worked together to drive innovation. Our universities, originally nonprofit religious institutions, led research and efforts even when we were colonies. President Lincoln’s creation of the land grant college system, public universities, proved brilliant. The GI Bill transformed college attendance from a privilege of the elites into the broad avenue of entry into the middle class and beyond. In many states, community colleges provide an entry to higher education to even more Americans. It is our universities that drove the incredible growth of patents. It is why we dominate the Nobel Prizes in science and medicine. It is why people all over the world hope their children will be admitted to our universities. And it is our universities that are being trashed. Public support for universities, as a proportion of total funding, has fallen for decades. We are destroying that which makes the private sector most innovative.

But that understates the problems with the crude lie that “our free enterprise system is what drives innovation.” It is all three sectors, working together, that drive innovation, with pride of place going to the nonprofit and public sector. The rule of law and democracy, government functions, were also critical to innovation. Public education began early in the North. The South resisted public education and blocked passage of the bills to create the Land Grant college system. The North quickly became economically dominant.

Worse, the “free enterprise system” is a primary cause of the problems that Senator Obama correctly said posed terrible dangers to Americans. Free enterprise drives climate change. Free enterprise brought us the Hummer and appalling overall energy inefficiency in U.S. cars and trucks. Big oil has always been a bastardized version of “free enterprise.” Big oil in its dealings with OPEC nations (corrupt members of a cartel) bears no resemblance to “free enterprise.” If Senator Obama is correct, then “free enterprise”, or what passes for it in the oil and coal industries, created climate change, pollution, and energy dependence on the Mideast that poses an unbearable risk to all Americans. President Obama told us this about big oil and innovation:
[i]
We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.
[/i][b]
So Obama understands that in circumstances in which developing “tomorrow’s” energy is essential to prevent twin national disasters and big oil is astonishingly wealthy and highly subsidized by the government, big oil continues to invest overwhelmingly in “yesterday’s energy” instead of driving innovation. Obama repeats the mantra that free enterprise drives innovation but his own examples prove the opposite. Even when the private sector has ample funds to innovate on its own, there is a vital national need to do so, and its shareholders would benefit from the innovation, big oil will not lead the essential innovation. And this is a sector that Obama chooses for his ode to the private sector. Obama’s answer to the catastrophic “free market” failure he describes (but refuses to call) is to stop big oil’s tax benefits but have the government pay for scores of billions of dollars in research costs by big oil’s scientists. Either way, big oil gets ever richer at the public’s expense.

The banking crisis should have taught Obama that the “free market” is not necessarily free, does not necessarily function like the “markets” described in economics texts, and can produce “innovations” that make its leaders rich by impoverishing the nation. Markets that have effective regulatory “cops on the beat” can be efficient and fair. Markets overseen by anti-regulators can become endemically fraudulent and cause Great Recessions. Obama’s financial team continues to be led by the anti-regulators that helped make our financial system so criminogenic that it produced the Great Recession. (Bush’s financial team was even worse.) This is why the elite frauds now loot “their” banks with impunity.
[/b]
The closest analog to the Sputnik moment is the collapse of the financial system in 2008 under President Bush shortly after Lehman failed. That collapse demonstrated the intellectual bankruptcy of theoclassical economics and its anti-regulatory and anti-governmental reflexes.
[i]
Bill Black is an associate professor of economics and law at the University of Missouri-Kansas City, a white-collar criminologist, a former senior financial regulator, and the author of [url=http://www.amazon.com/Best-Way-Rob-Bank-Own/dp/0292706383]The Best Way to Rob a Bank is to Own One[/url].[/i][/quote]
[i]My Comment:[/i] One wag commented that Obama`s speech was more akin to the nation`s [url=http://en.wikipedia.org/wiki/Clarence_Dupnik]Dupnik[/url] moment.

Japan Credit Rating Cut | Riots In Egypt
 

Couple of Mish Links:

[url=http://globaleconomicanalysis.blogspot.com/2011/01/japans-credit-rating-cut-first-time-in.html]Japan`s Credit Rating Cut[/url]: Once their aging population becomes net sellers of Japanese government bonds and they have to start borrowing on the open market, they are screwed. Bizarrely, the Yen remains strong ... for now.

Big collections of article links related to the frowing unrest in Middle East domino #2, Egypt:

[url=http://globaleconomicanalysis.blogspot.com/2011/01/blood-on-bernankes-hands-riots-in-egypt.html]Blood on Bernanke's Hands; Riots in Egypt over Food Prices and Unemployment; Protests Spread to Algeria, Morocco and Yemen; Twitter in the Spotlight[/url]
[quote]Violence in Egypt continues unabated in spite of President Hosni Mubarak's plea for calm. Demonstrators threw firebombs and chanted "Down with Hosni Mubarak, down with the tyrant." Police responded with teargas and bullets.

Protesters are angry over poverty, rising food prices, state food subsidies, unemployment, and social conditions.

Social media outlets, especially Twitter have played a leading role in organizing protests. The Obama administration and the US state department have also resorted to Twitter and Facebook.
...
[b]Protesters Burn Tires, Throw Molotov Cocktails[/b]

The New York Post reports [url=http://www.nypost.com/p/news/international/us_demands_reform_amid_egypt_riots_SItth5nTmukJVJSUkzJK6J]US demands reform amid Egypt riots[/url]
[i]
Thousands of protesters burned tires, threw Molotov cocktails at a government building and fought riot police in Egypt yesterday in the worst unrest in President Hosni Mubarak's 30-year-old rule.

Police retaliated with tear gas, beatings and by firing live ammunition in the air in street clashes that mirrored those that drove Tunisia's dictator from power two weeks ago.

The unprecedented street fury against Mubarak -- a close US ally -- prompted the Obama administration to deliver a rare public demand for change in Cairo.

"We believe strongly that the Egyptian government has an important opportunity at this moment in time to implement political, economic and social reforms to respond to the legitimate needs and interests of the Egyptian people," Secretary of State Hillary Rodham Clinton said[/i].[/quote]
[i]My Comment:[/i] And where was this concern for "the legitimate needs and interests of the Egyptian people" for the past 30 years? Bloody hypocrites. The irony is, the U.S. government is hugely worried about the influence of islamists and al-Qaeda in the Middle East ... maybe if they spent more time worrying about "the legitimate needs and interests of the people" in that region rather than propping up one corrupt autocratic regime after another, the countries there would not be such fertile breeding grounds for extremism.

And in a more-recent post, Mish reports that Egyptian authorities, in an act that smacks of desperation, have shut down the Internet in the country:

[url=http://globaleconomicanalysis.blogspot.com/2011/01/egypt-shuts-down-internet-blackberry.html]Egypt Shuts Down Internet, Blackberry, Text Messages; Mubarak Rival Returns to Egypt; Protests Rattle Yemen; Only Certainty is Uncertainty[/url]
[quote]Confirming what a few have reported this evening: in an action unprecedented in Internet history, the Egyptian government appears to have ordered service providers to shut down all international connections to the Internet. Critical European-Asian fiber-optic routes through Egypt appear to be unaffected for now. But every Egyptian provider, every business, bank, Internet cafe, website, school, embassy, and government office that relied on the big four Egyptian ISPs for their Internet connectivity is now cut off from the rest of the world.[/quote]

And Karl Denninger, now that he`s done with his latest anti-gun control rant, gets back on topic and explains the "Bernanke has blood on his hands" thesis nicely:

[url=http://market-ticker.org/akcs-www?post=178559]How to destabilize a regime[/url]

The ongoing mortgage mess has driven the US government to measures to wallpaper over the damage. One recent attempt was to block rescissions:
[URL="http://www.huffingtonpost.com/2011/01/04/federal-reserve-rescission-regulation_n_804334.html"]Fed Moves To Gut Predatory Lending Regulation. -- The Huffington Post, January 4, 2011[/URL].[QUOTE]The regulation would severely limit a practice called "rescission," used to strike down demonstrably-illegal or fraudulent loan contracts and void a bank's ill-gotten gains from such predatory lending practices. When a mortgage borrower wins a rescission case in court, the bank loses the right to foreclose, and has to give up all profits from interest and fees on the loan. The borrower still has to repay the principal -- the original amount of money extended by the bank -- but can't be kicked out of the house.

Under the Fed's new proposal, however, borrowers would be required to pay off the balance of the loan before the bank loses its right to foreclose -- that means borrowers could still lose their homes, even in cases where banks have broken the law.[/QUOTE][QUOTE] All Fed regulations are open to public comment from anyone, but it is unusual to see a high volume of individuals weigh in on a technical consumer protection rule.

"I view this as nothing less than a criminal ploy to shove hard working Americans out of their homes and onto the streets," wrote Ann Capotosto in an undated comment letter. "It is immoral and must be stopped."

"Think of mankind for once, please," requested Larissa Cavanaugh in a Dec. 4 letter.

"Have you lost your minds?" inquired Beth Findsen in another letter from Dec. 4. "In the depths of an unprecedented catastrophe for the middle class, related to the predatory loans and their rapacious securitization by the financial industry, resulting in millions of middle class Americans losing all of their wealth and their homes, you want to loosen TILA? Are you tone deaf? Have you lost your humanity entirely?"[/QUOTE]TILA, mentioned above, refers to the [URL="http://en.wikipedia.org/wiki/Truth_in_Lending_Act"]Truth in Lending Act[/URL].

It seems that in this particular case, the Fed wilted in the face of opposition:
[URL="http://www.huffingtonpost.com/2011/01/24/fed-backs-down-from-plan-_n_813222.html"]Fed Backs Down From Plan To Gut Mortgage Regulation -- The Huffington Post, January 24, 2011[/URL][QUOTE]The central bank has informed several consumer agencies that it will table its proposal to eliminate "rescission," a critical component of consumer-protection law that strips banks of the right to make money on illegal loans.[/QUOTE]This use of " [URL="http://en.wikipedia.org/wiki/Table_(parliamentary_procedure)"]table[/URL]" (used in the above quote) has a different meaning across the pond; in this case it is intended to mean suspend consideration (and not act upon).

This second article further notes that rescissions only apply to refinanced mortgages:[QUOTE]Rescission only applies to mortgages that have been refinanced, but inducing a borrower to refinance their home in order to strip equity from them is a key tactic used in predatory lending. Rescission claims are one of the most common challenges to bank wrongdoing in the United States, with thousands of cases currently working their way through the judiciary.[/QUOTE]

Bankers whinging at Davos
 

Being chiefly a British word, the first time I noticed "whinging" was when it was applied to my complaints about gasoline prices within these forums. Now that I know of it, I quite like the word. My chrome browser thinks that it is a misspelling of whining (as did I at first).

Paul Krugman doesn't like the whinging of the bankers at Davos, Switzerland ( where the World Economic Summit is being held from January 26th to January 30th):
[URL="http://krugman.blogs.nytimes.com/2011/01/29/mhlamf-in-davos/"]MHLAMF in Davos[/URL][QUOTE]MHLAMF in Davos
From the FT:
[INDENT]Governments around the world must stop banker-bashing and create the right environment for lenders to support economic growth, some of the world’s most powerful bankers will tell finance ministers on Saturday.[/INDENT]
So “[URL="http://krugman.blogs.nytimes.com/2010/09/22/waaaaah-street/"]Ma! He’s looking at me funny![/URL]” is now at the core of the financial sector’s complaints. And the world’s top bankers feel that after bringing on a gigantic crisis that has left millions unemployed, being bailed out, and receiving huge paychecks all the while, they now have the right to demand that people stop saying critical things about them.

Oh, and substantively, they want interest rates to rise despite the persistence of high unemployment.[/QUOTE]Entry into the summit is not cheap: [URL="http://dealbook.nytimes.com/2011/01/24/a-hefty-price-for-entry-to-davos/"]A Hefty Price for Entry to Davos[/URL][QUOTE]Just to have the opportunity to be invited to Davos, you must be invited to be a member of the World Economic Forum, a Swiss nonprofit that was founded by Klaus Schwab, a German-born academic who managed to build a global conference in the snow.

There are several levels of membership: the basic level, which will get you one invitation to Davos, costs 50,000 Swiss francs, or about $52,000. The ticket itself is another 18,000 Swiss francs ($19,000), plus tax, bringing the total cost of membership and entrance fee to $71,000.

But that fee just gets you in the door with the masses at Davos, with entry to all the general sessions. If you want to be invited behind the velvet rope to participate in private sessions among your industry’s peers, you need to step up to the “Industry Associate” level. That costs $137,000, plus the price of the ticket, bringing the total to about $156,000.

Of course, most chief executives don’t like going anywhere alone, so they might ask a colleague along. Well, the World Economic Forum doesn’t just let you buy an additional ticket for $19,000. Instead, you need to upgrade your annual membership to the “Industry Partner” level. That will set you back about $263,000, plus the cost of two tickets, bringing the total to $301,000.

And if you want to take an entourage, say, five people? Now you’re talking about the “Strategic Partner” level. The price tag: $527,000. (That’s just the annual membership entitling you to as many as five invitations. Each invitation is still $19,000 each, so if five people come, that’s $95,000, making the total $622,000.) This year, all Strategic Partners are required to invite at least one woman along in an effort to diversify the attendee list.

As part of the Strategic Partner level, you get access to the private sessions as well as special conference rooms to hold meetings. And perhaps the biggest perk of all, your car and driver are given a sticker allowing door-to-door pickup service.

At the moment, the forum says it is not accepting applications to become a Strategic Partner unless the company is from China or India and it must be one of the 250 largest in the world.

In fairness, it is worth pointing out that membership at all levels does not just get you access to the meeting in Davos, but also to at least a half-dozen other meetings held around the world. Membership also gives you access to the forum’s various research projects as well.[/QUOTE]

These bankers aren't contritely maintaining an austerity policy at the summit either (from the article just quoted):[QUOTE]One large investor is renting a five-bedroom chalet this year just outside of Davos for himself and his staff. The cost? $140,000 for the week. A car and driver, which the World Economic Forum will organize for you, is about $10,000 a week for a Mercedes S Class.

A first-class fare from New York to Zurich is running at about $11,000. But a private plane using NetJets will cost about $70,000 round trip, according to one executive who has used the service. Helicopter service from Zurich to Davos? $3,400 each way. (The forum provides a free bus service for those worried about their environmental footprint.)

Of course, many companies have dinners for clients, with dinners on multiple evenings for some firms.

At the Posthotel, for example, the restaurant is charging a minimum of $210 a head. A cocktail party for 60 to 80 people for just one hour? That costs about $8,000. Two hours? $16,000.

The bigger parties, like one that will be given by Google on Friday night for several hundred people, can run more than $250,000 for the evening. (In years past, Google has flown in the band and bartenders; one year, the company had an oxygen bar.)

All these embedded costs have helped make the World Economic Forum a big business — perhaps the biggest conference organizer in the world. According to its annual report, it brings in about $185 million in revenue and spends nearly all of it, with almost half of its costs going toward events and the other half on personnel.[/QUOTE] Paul Krugman was actually generous in his quote from the Financial Times because he omitted this from a banker: “We need to stop authorities around the world throwing sticks and stones at us. We should be past that now,”

Sticks and stones? We should be past that? Sticks and stones are the Tunisian riots and perhaps other rioting in the world right now. We are not at all close to past that. Calling the bankers names may not be constructive toward solutions, but if it really was sticks and stones thrown at the bankers, they would [I]so [/I]know it.

[QUOTE=davar55;250383]Good interesting take, I gotta check out that acronym someday.

But not today.

Riots, rebellion in egypt/etc, could be a harbinger.[/QUOTE]The acronym MHLAMF is a nonce usage from a previous New York Times blog piece by Paul Krugman: [URL="http://krugman.blogs.nytimes.com/2010/09/22/waaaaah-street/"]Waaaaah Street[/URL] [QUOTE]Did our nation’s elite always consist of such spoiled brats? I don’t think so. We’re in the new Gilded Age — but while the old robber barons said “The public be damned”, the new ones say “[B]Ma! He’s looking at me funny![/B]”

And these are the Masters Of The Universe.[/QUOTE]"Masters of the Universe" is a reference to the book [I][URL="http://en.wikipedia.org/wiki/The_Bonfire_of_the_Vanities"]The Bonfire of the Vanities[/URL][/I].

Japan's Lost Youth | Protests in Jordan, S.Arabia
 

[url=http://www.nytimes.com/2011/01/28/world/asia/28generation.html?_r=1&src=me&ref=world]The Great Deflation: In Japan, Young Face Generational Roadblocks[/url]
[quote]TOKYO — Kenichi Horie was a promising auto engineer, exactly the sort of youthful talent Japan needs to maintain its edge over hungry Korean and Chinese rivals. As a worker in his early 30s at a major carmaker, Mr. Horie won praise for his design work on advanced biofuel systems.

But like many young Japanese, he was a so-called irregular worker, kept on a temporary staff contract with little of the job security and half the salary of the “regular” employees, most of them workers in their late 40s or older. After more than a decade of trying to gain regular status, Mr. Horie finally quit — not just the temporary jobs, but Japan altogether.

He moved to Taiwan two years ago to study Chinese.

“Japanese companies are wasting the young generations to protect older workers,” said Mr. Horie, now 36. “In Japan, they closed the doors on me. In Taiwan, they tell me I have a perfect résumé.”

As this fading economic superpower rapidly grays, it desperately needs to increase productivity and unleash the entrepreneurial energies of its shrinking number of younger people. But Japan seems to be doing just the opposite. This has contributed to weak growth and mounting pension obligations, major reasons [url=http://www.nytimes.com/2011/01/28/business/global/28yen.html]Standard & Poor’s downgraded Japan’s sovereign debt rating on Thursday.[/url]

“There is a feeling among young generations that no matter how hard we try, we can’t get ahead,” said Shigeyuki Jo, 36, co-author of “The Truth of Generational Inequalities.” “Every avenue seems to be blocked, like we’re butting our heads against a wall.”

An aging population is clogging the nation’s economy with the vested interests of older generations, young people and social experts warn, making an already hierarchical society even more rigid and conservative. The result is that Japan is holding back and marginalizing its youth at a time when it actually needs them to help create the new products, companies and industries that a mature economy requires to grow.
...
Employment figures underscore the second-class status of many younger Japanese. While Japan’s decades of stagnation have increased the number of irregular jobs across all age groups, the young have been hit the hardest.

Last year, 45 percent of those ages 15 to 24 in the work force held irregular jobs, up from 17.2 percent in 1988 and as much as twice the rate among workers in older age groups, who cling tenaciously to the old ways. Japan’s news media are now filled with grim accounts of how university seniors face a second “ice age” in the job market, with just 56.7 percent receiving job offers before graduation as of October 2010 — an all-time low.

“Japan has the worst generational inequality in the world,” said Manabu Shimasawa, a professor of social policy at Akita University who has written extensively on such inequalities. “Japan has lost its vitality because the older generations don’t step aside, allowing the young generations a chance to take new challenges and grow.” [/quote]
[i]My comment:[/i] I wonder how much of this kind of thing will be happening in the U.S., as many baby boomers - who as a generation have saved [url=http://www.nytimes.com/2003/07/13/business/yourmoney/13SENI.html?ex=1058673600&en=8264094f5eafee37&ei=5062&partner=GOOGLESENIORITY]woefully little[/url] for retirement - delay retirement out of monetary necessity.

---------------------------------

[b]Middle East: Protest Spread to Saudi Arabia, Jordan[/b]

Mish has a nice summary of recent events here:

[url=http://globaleconomicanalysis.blogspot.com/2011/01/egypt-closes-banks-stock-market_29.html]Egypt Closes Banks, Stock Market; Protests Spread to Saudi Arabia, Jordan; Saudi King Backs Mubarak; Reflections on Misguided US Policy[/url]


Other ME "dynasties" are getting increasingly nervous about the emboldened citizenry of the region:

[url=http://www.theaustralian.com.au/news/world/desert-strongmen-try-to-buy-off-their-peoples-growing-anger/story-e6frg6so-1225996899433]Desert strongmen try to buy off their people's growing anger[/url]: [i]Shaken out of their complacency by the tumultuous events of the past month, aspiring dynasty-builders of the Arab world are nervously throwing money at restive populations in the hope of keeping their families in power.[/i]
[quote]From Tunisia in the west to Yemen in the east, the brazenly dynastic leanings of the region's strongmen and their families have helped to drive people onto the streets.

Tunisia's jasmine revolution not only pushed President Zine Ben Ali into exile but put a halt to the ambitions of Leila, his acquisitive wife, to succeed him.

In Egypt, the wrath of protesters was fired mainly by opposition to Hosni Mubarak but partly by the possibility that he might be succeeded by Gamal, his son, a 47-year-old former investment banker whose succession would have been dressed up as a “democratic transition”.

Other regional leaders appear to have taken note. Having previously been content to ignore the downtrodden masses, some desert dictators have become models of munificence. Al-Ahmed Al-Jaber Al-Sabah, the Emir of Kuwait, recently announced plans to give every citizen $3600 and is offering free food to his people until March next year.

Syria, domain of the al-Assad dynasty and perhaps the most repressive of Arab regimes, also looks nervous. For the moment Damascus is calm - the country has a habit of crushing any dissent with ferocious efficiency - but the government is taking no chances: it recently raised the heating fuel allowance by 72 per cent to $32 a month. It has also set up a $250 million fund to give loans to poor families.

Until recently, the government had been ruthlessly slashing subsidies as part of an effort to emerge from the economic crisis.[/quote]


One of the reader replies to this ZeroHedge article gives a nice overview of Saudi Ethno/petro/political geography:

[url=http://www.zerohedge.com/article/saudi-stock-exchange-plummets-6]Saudi Stock Exchange Plummets 6%[/url]
[quote]by chindit13
on Sat, 01/29/2011 - 22:49
#917328

For those unfamiliar with the lay of the land in Saudi Arabia, here it is in a nutshell.

There are three major population areas in the country, separated by unbelievably bleak desert. The west coast is Jeddah, the commercial hub and former capital, and the gateway to the two holy cities of Mecca and Medinah (banned to non-Moslems). Jeddah is the traditional home to most of the major business families, the names of many of which are well known internationally (bin Laden, bin Mahfooz, Suleiman, Juffali, Kamel, Bakhsh).

In the center is the capital of Riyadh, near the birthplace of the al Saud family, and the heart of Wahabi land. Riyadh has no business being there, and has long been one of the most surreal creations on the planet, a man-made oasis in the middle of perhaps the most harsh climate on Earth. Budding architects cut their teeth on Riyadh in the 1980's. Imagine Disneyland without any smiling faces.

In the east is the Dhahran area, the heart of Saudi Arabia's oil producing lands. Unlike Jeddah and Riyadh, Dhahran/Dammam is majority Shi'ite Moslem, the same as Iran. This has always been a potential flashpoint, as Shi'ites in general are afforded second class status in Saudi, but steady work in the oil industry has kept many so pacified that the predominant threat in the Kingdom has switched from Shi'ite to fanatical Islam (largely Sunni in Saudi Arabia). The oil industry is especially vulnerable to terrorism because of the existence of gas oil separating plants (GOSPs), some of which are offshore, and almost all of which are difficult to guard. Then there are pipelines, which run unguarded through long stretches of desert.

Saudi also has two major industrial cities, Yenbu on the west and Jubail in the east, built during the 1980's to house most of the petrochemical facilities and some oil-loading docks. Yenbu is fairly isolated, though the much larger Jubail is just north of Dhahran.

In 1980 the population of the country was reported to be 4 million, of which 3 million were Saudi and the rest expatriate workers of every level. The majority of the expatriates were from Yemen, Pakistan and the Sudan. Others were from the major manpower exporting nations like the Philippines, Thailand and Indonesia. A sprinkling of Palestinians occupied administrative positions in commercial companies.

Today Saudi reports its population as 21.7 million, a staggering leap from the (probably poorly assessed) 4 million of 1980. Of this new total, a third are estimated to be expatriates.

When the population was small, and oil revenues relatively substantial ($30-40/bbl and 12-14 mmbbl/day in 1980), there were sufficient numbers of jobs and government subsidies to keep most people happy. The al Saud family has a certain degree of legitimacy because they founded the country, and in the past the substantial support given to royalty merely because of their royalty was more easily tolerated. Over time the self-image of the population has slowly morphed from being subjects of the al Sauds to being citizens of Saudi Arabia.

With unemployment skyrocketing, it remains to be seen if the ruling elite retains it legitimacy, especially since the country is near the first generational shift of power in more than fifty years.[/quote]

Losses at Afghan Bank Could Be $900 Million
 

[url=http://www.nytimes.com/2011/01/31/world/asia/31kabul.html?ref=world]Losses at Afghan Bank Could Be $900 Million[/url]
[quote]KABUL, Afghanistan — Fraud and mismanagement at Afghanistan’s largest bank have resulted in potential losses of as much as $900 million — three times previous estimates — heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to American, European and Afghan officials.

The extent of these losses make it clear that keeping the bank afloat — something the government has said it is determined to do — would require large infusions of cash from an already strained budget.

Banking specialists, businessmen and government officials now fear that word of Kabul Bank’s troubles could prompt a run on solvent banks, destroying the country’s nascent banking system and shaking the confidence of Western donors already questioning the level of their commitment to Afghanistan.

The scandal has severe political and security implications. Investigators and Afghan businessmen believe that much of the money has gone into the pockets of a small group of privileged and politically connected Afghans, preventing earlier scrutiny of the bank’s dealings. [/quote]
[i]My Comment:[/i] Before you blame Karzai and his corrupt club of cronies, consider that they probably simply looked at how the U.S. Federal Reserve has been operating as an unaudited and unlimited bailout slush fund for corrupt American (and select foreign) TBTF banks, and figured "if this is the way the world`s foremost `democracy` does things, we can happily support those kinds of `democratic` principles".
[quote]The spotlight on how political and economic interests in Afghanistan are intertwined threatens to further undermine President Hamid Karzai’s government. The bank is also the prime conduit for paying Afghan security forces, leaving the American military, which pays the majority of the salaries, looking for new banks to process the $1.5 billion payroll.[/quote]
Funny how there seems to be a never-ending supply of scandals which "threaten to undermine President Karzai’s government", but Karzai never seems worried. It`s good to be a U.S. designated "reliable ally in the war on terror", or "the best ally we`ve got" (if you`re too big of a scumbag to even warrant the epithet "reliable") in whatever far-flung hellhole the U.S. is squandering its citizens` blood and a big chunk of its future prosperity.
[quote]As Afghan regulators struggle to find out where the money went, many officials and international monitors concede that the missing millions may never be recovered, raising questions of how the losses could be replaced to keep the bank from failing.[/quote]
Puh-leeze ... as if there is the slightest scintilla of doubt in the matter. Ben Bernanke squanders more U.S. taxpayer money than that every times he wipes his Bernankian backside.
[quote]Afghan officials and businessmen have said the money was invested in a real estate bubble that has since burst in Dubai, as well as in dubious projects and donations to politicians in Afghanistan. Millions of dollars have yet to be traced, and some of the money seems to have gone to front companies or individuals and then disappeared.[/quote]
Again, this is simply following the American playbook for never-ending prosperity. The Afghans have learned from the best bubble-blowers in history. Nice to see them applying their hard-won lessons in the real world.
[quote]Many donor countries may have to delay aid to Afghanistan because of their own requirements that money go only to countries with I.M.F. programs in good standing, Western diplomats said.

Several officials described the bank as “too big to fail,” referring to its role in paying the salaries of hundreds of thousands of government employees.

While Afghan and American officials depict a crisis far worse than has been made public, State Department cables released by WikiLeaks show that Afghan and Western regulators were aware of many of the problems, but were most focused on the problem of terrorist financing, rather than the fraud scheme that was the main problem at Kabul Bank.[/quote]
Not that any of the looted funds may have ended up in the terrorists` hands, or anything... (cough, cough).
[quote]Deloitte, a top United States accounting firm that had staffers in the Central Bank under a United States government contract over the last several years, either did not know or did not mention to American authorities that it had any inkling of serious irregularities at Kabul Bank. Deloitte was not responsible for auditing the bank’s books; a spokesman for Deloitte did not respond to requests for comment.[/quote]
I am shocked - shocked! - to see a big U.S. accounting firm caught in such an embarrassing lapse. (BTW, Deloitte probably "won" the contract after Arthur Andersen (now Accenture, "No relation to those Enron accountants") bowed out, saying it was busy with some "Enron" dealie-o. And of course Ernst & Young was fully occupied cooking the books for their #1 client, Lehman Brothers).

food prices
 

[URL="http://www.guardian.co.uk/business/2011/jan/05/world-food-prices-danger-record-high-un"]World food prices enter 'danger territory' to reach record high[/URL]

[URL="http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/"]FAO Food Price Index[/URL]

[URL="http://latimesblogs.latimes.com/babylonbeyond/2011/01/egypt-videos-of-protests-.html"]EGYPT: Videos taunt President Hosni Mubarak, defy media crackdown[/URL][QUOTE]The above video of a group of protesters in Cairo was posted without comment Saturday. Within hours, a commenter had provided an accurate translation of the slogans being chanted:

"Leave, leave, Mubarak! Tel Aviv is waiting for you! Gamal, tell your father, the Egyptian people hate you! We've had enough! They've raised the price of sugar and oil; they've wrecked our homes. Raise your voice, people of Egypt! We can't even find beans!"[/QUOTE] Obviously many other strong factors exist. There seems to be quite a bit of this dynamic yet to play out.
[URL="http://www.desmoinesregister.com/article/20110130/BUSINESS/101300340/Food-cost-shocks-ripple-worldwide-from-Iowa?Frontpage"]Food-cost shocks ripple worldwide from Iowa[/URL]

[URL="http://www.paulchefurka.ca/Food_Energy.html"]Connecting the Dots: Food and Fossil Fuels[/URL]
This last article link is included primarily for the its' food vs fuel chart that has been copied several places on the web. The rest of the article has a viewpoint that is alarming from a peak oil standpoint.

[QUOTE=only_human;250721][URL="http://www.paulchefurka.ca/Food_Energy.html"]Connecting the Dots: Food and Fossil Fuels[/URL]
This last article link is included primarily for the its' food vs fuel chart that has been copied several places on the web.[/QUOTE]I'd be more impressed if Paul Chefurka's fuel figures had excluded non-food-related uses.

Including fuel for transporting food is okay, but fuel for shipping clothes to department stores, or for transporting Packer fans to Dallas ahead of next weekend, is not. If he wanted to make the argument that the proportion of food-related fossil-fuel use was relatively constant, then he should have made that argument .. but he didn't, and I don't know if it would be valid.

[quote]The rest of the article has a viewpoint that is alarming from a peak oil standpoint.[/quote]Both his "World Oil Production" and "World Net Oil Exports" charts show the effect of the oil price speculation spike and then the recent world recession at their upper right corners. They prove nothing about production capacity, which is what Peak Oil is about.

As for his "World Grain Production vs. Fossil Fuel Use", first note that it's about only [I]grain[/I], not all food. The flatness is [I]not[/I] evidence of "a constant amount of fossil fuel to produce a ton of grain", either. Correlation isn't causation, and I wonder if the graph would be as flat if [I]all[/I] food were represented.

As an example of non-causation: what if a decline in amount of fossil fuel used to grow a unit of grain were approximately offset by a rise in the proportion of grain that is shipped internationally (using fossil fuel to do the transport)? Inclusion of the transport fuel could confuse the issue of cultivation efficiency -- and that would be _if_ the fossil fuel use figures were restricted to only food-related uses (which they're not). How about a rise or fall in the proportion of shipped grain that is lost or spoiled before use? What about a rise/fall in the proportion of grain on which fossil fuel is expended to cultivate, but which is not harvested successfully because of weather losses?

Sloppy reasoning and presentation there. I'm not surprised that his graphs have been widely copied -- there's not a large proportion of critical thinking out there.