Network Inefficiencies Encourage Hackers

I should add market inefficiencies! As it were to revisit the Napster mechanisms of circumventing unreasonable costs. Where the actual market is artificially restrained by monopoly or poor governmental choices and licensing, one can expect a proliferation of black market activity. This is like a school for scandal! In the case of telecom streams this means hacking will be rife as users perceive the market as being out of wack with what is available from a simple hack. Market leakages to black markets redress some of the inequities produced by excessive market advantages that are purely administrative and bear little relationship to non-political advantages. Such is Canada and it's relationship to European and US markets. The Canadian hacking community will flourish given these incentives of mis-managed market mechanisms.

High Cost of Canadian Cell Phone Use

It would appear that nothing has changed in Canada. It is still extraordinarily inefficient. This is especially the case in telecommunications where monopolies drain Canadians pocketbooks while offering poor service without competition one would like to see so close to the US. Essentially, Canada is moving away from being competitive and will be very vulnerable over the long term to outside shocks.

The Pace of Evolution

We do not see the obvious some times, but it is increasingly evident that technology defines our existence increasingly. We used to see nature as a solution provider, but increasingly it is man's domination of nature that motivates intelligent life. The problem with this is that it reflects an imbalance between constructive and destructive forces, and in evolving, man has all to often become the destructive force. For example, in Africa there is the capacity to grow enough food to end starvation world wide! But what does mankind do with this opportunity? It is destroyed. What are you evolving into? We have the tools to end AIDS worldwide and to end hunger. We gave not figgured out the organization of these tools to do good in the face of unkind opposition that is not well informed. Can we educate people to end the cycles of misery or are there always going to be areas of immense suffering that we cannot ever reach?

Blogging with a mobile phone

Small is better. I've concluded that Microsoft has lost already!

Medical Systems

It might be said that a society gets the medical system it deserves. However, what we are really talking about is how people prioritize the suffering of others. Many communities think of America as somewhat hyprocritical because of the unnecessary suffering that goes on within it's borders. Shame on you, America can't you lead the world in a medical system for everyone.

Left and Right Wing

Does history not tell you more often than not that being on the left means you are trying to reduce people's suffering or the suffering of others, while being on the right means that one wants the status quo even though it means people and creatures suffer! There us nothing shameful about being on the left, but there is something shameful about not being aware of suffering whether you are coming from the right or the left.

Will the madness not stop?

The Internet is very good at highlighting activities of madness where animals or people suffer at the mercy of people making a living or garnishing a 'bloody' profit. Lately the sale of asbestos from Canada to India comes up, as does the silent slaughter of dolphins in coves along Japanese coasts. Neither activity should be allowed by law yet Canadian politicians and Japanese have not passed legislation. What is it with these 'Bushy' governments?

What is it with these Alberta gunslingers that would rather slaughter more than a dozen bears than build fences!? The bears are dead but not the need for an annual cull because the solution is an ass of mental depravity. Stupid! Stupid! Stupid! Where did all the oil money go if it wasn't into the hands of people who do not care for anything let alone a few very ordinary animals that just might be telling Albertans that they are sleepwalking away from common sense! Who is in the wrong the bears, the dolphins, or the men and women who seem not to have complete grade school?

From the Back Room to the Woods

Computers are indeed evolving. There are now more computers in the wilderness than there used to be in the cities. From cool cellar to office, from office to desk, from desk to lap top, from lap top to hand. You get the idea of an evolution? From IBM to Hewlett Packard to Microsoft to Apple, and the trend continues. Or, do you not see the cycles?

The How and the Why of Ghosts

Do you need to take the idea of ghosts very seriously? Perhaps not, because they are not something that you can ever put you hands on, especially if you are a practical person. Are ghosts relevant in one's everyday life? Possibly not, but you really don't do not know.

Ghosts are very personal things and they are tagged to the past and places of the past. Since most people think that the past does not matter all that much, then ghosts won't matter that much, perhaps.

Our past realities define the how and the where of ghosts. The why of ghosts is more complex. Ghosts do exist, and they do come in many forms. They are a mental fact and reflect how our brain works and what our brain is capable off. If I say that time and space are the same thing a la general theory of Einstein then I might be forgiven if I say that in the future we will visit earth as ghosts. If you travel fast enough the earth will age while you remain young. As a young person you may arrive back on earth to find all your friends of a few moments earlier being presently just ghosts of the past. Yes ghosts really do exist, but we don't yet know the why of the ones we have experienced. We do know that they are possible and that our mind has many ghostlike qualities. We do know that everything we do or say continues on, otherwise Einstein would be wrong and the general theory of relativity would be false. We know that is not the case and ghosts are very real!

Memristors .. Are we ready for another electronics revolution?

Well it seems that nature is telling us that natural electronics still has a few surprises. One of these is a future component of electronic circuits that could make everything that we have seen so far seem like kids play .. welcome the memristor!

Wars are Obsolete and Peace is State of the Art

So many young men and women have gone to war at the urging of governments and organizations that were misled or deranged that we can say that wars are our greatest threat. We can see clearly that those that started war failed miserably. They inevitably lost more than they could have gained through other means. We can easily say that war is generated by losers.

It is also false to say that human nature predisposes people towards war. More accurate would be the assertion that war is a trap of nature coming from outside human desire. People are led into war unwillingly like being channeled down a fast moving river. Those caught in the current drag others in with them in a firm of overwelming madness that goes totally against what is in everyones best interests. Technology is the generator of war and an ignorance of how to manage technology safely is at the source of misuse that ends in war. Religion is a form of social technology that can be misused and the mismanagement of religion is at the root of many wars. Addictions are at the heart of many wars and represent technologies where people are incompetent users. At the heart of peace is the capacity to use technology towards beneficial goals. It is this, the direction of the use of technology, that is at the heart of peace.

Education on the proper use of technologies will create peace. Teach people how to use drugs effectively and how to eliminate addiction and one will create peace where drug wars once were.

Show people how to remove guns from temptations and one can eliminate the urge to use guns as a method of resolving differences.

We need to invest in peace making technology as much as we do in the instruments of war. This applies to religions as much to governments as to war lords and organized crime.

Downsizing as a Way to Reduce Waste

It is a paradox, but the prescription of many economic experts during hard times is to create more waste. This all to often is what economic growth is all about, and it is particularly nasty in the case of small economies.

My favourite economics professor at Cambridge was the growth theorist Lord Kaldor, who was also my examiner on many occasion. Lord Kaldor held that the strongest law in economics was fertility and he associated this with economies of scale and size of productive unit.

Most economists realize that a single enormous plant is now the most efficient way to produce, distribute and sell almost everything. If one can make something smaller as the iPhone has done with computers then one has actally enlarged the something. Accordingly, as the transistor and integrated circuits became smaller they actally became larger on economic terms.

The size of everything is an economic decision and everything in economics is affected by technology. My technology determinism thinking did not go down well at Cambridge University because the more traditional social determinism views of markets and economies held sway. However, our reality is that is you live in a small economy the size of packages of items such as shampoo will be larger because the seller and producer want you to buy more than you need. Think everytime you eat that you are made fatter by oversizing of delivery systems and you will soon see how technologies of scale impact on who you are, who you are with, what you do and don't do. Yes you are a technological not and economic solution!

My finger is not small enough

Ever notice that when you use a touch based instrument you are too large. You are so inefficient!

Understanding Comes More Certainly if You Understand Statistics

It is no accident that science uses statistical method a great deal. Statistics represents a tool box of generating functions that create series that approximate series that are evident in the real world. Our everyday life is a result of sequence in which one thing follows another. When a statistical generator is found that matches the sequences of everyday life then one can use the statistical generator as an approximation of the expected sequence of events. This is where the real power of statistical generation lives.

Most often stastical series come as a consequence of cause and probable effect or as effect and probable cause. Looking back within a sequence of events helps us to understand. Then using that understanding and observing results help us to understand more. Eventually, we may understand without any hitches, but we need to be mindful that even a machine can break down if hit hard enough with a monkey wrench, or a system an break if it ets overloaded with monkeying around or just plain overloaded by too many monkeys.

Rising Water Levels

The water beside Lake Huron looks spectacular without the breeze, like glass. Those of us who notice will see that the Lake's water level is visibly higher than last year. Huron is an interior lake, but it's history will reflect what is happening elsewhere. The amount of water that will make a lake as large as Huron rise a meter is enormous, but that is what seems to have happened on less than three years. We are not worried about rising water here so much but are we mistaken to be so calm?

Maybe the muons are falling on our landscape and seeding low cloud formations. We see more rain these days here in Huron woods region. That is better than the lack of rain experienced where they normally see more rain, the maritime regions of British Columbia. What about the forest fires of Austrailia and BC!

Generally, water levels globally could be rising despite the building up of ice in Antarctica. The Artic ice is melting and we assume this to be a consequence of higher levels of co2. Might this also be due to sun spot activity peeking in the latest upward swing.

The earth is bombarded continuously by large energy particles and we don't have much insight as to the effects and cycles!

The Hard and the Easy: Why the West Needs to Think About the Direction of Economic Growth and Choose the More Difficult Path.

Unemployed technology and technologists not the banks are at the route of our economic ills. Overemployment in easy tecnologies of construction have been the wrong direction of growth by many economies. Short term profits and capital gains are not the way to run an economic system. There needs to be leadership towards the development of new industries within hard technologies rather than the easy peasy products that is driving western economies into penury. Growth by inflation in housing sectors and rralestate speculation is no way to manage an economy. Low interst rates indicate failure to choose the right direction of economic growth. Governments appear to be addicted to corruption of the politicians who have become specators of inflation rather than working to increase employment in new more difficult industry. Where is the leadership in spending taxes raised fr gambling, drugs, housing inflation, co2 pollution of or environment? Where is the incentive to keep people employed in the more difficult agricultural practices that are environmentally friendly? Who is directing the directions of economic change into the more difficult industrial or agricultural paths that we need to explore?

Is the New Gun Registry System a Pipedream?

This new UN gun registry covers all weapons and comprises a massive database system that can be used by law enforcement officers worldwide. Every weapon has a finger print. The new database stores that finger print before the weapon is sold to a member of the public or delivered to the military. All weapons manufacturers in all member countries of the UN must provide the information to the worldwide database before the weapon is sold.

This new system to be announced in time by the UN's new crime prevention unit has the capability of tracking down every new and existing registered weapon to its victim if the projectile or bullet is retrieved. Even in a wartime scenario the innocent victim of killing by a soldier can be traced to the soldier's weapon. The system will save lives if only because the criminal will know that use of a weapon will be traceable by an international police or UN agency.

The new database to be implemented requires that every existing owner of a weapon be registered. All weapons of soldier will be registered under the new system. This information is to be kept in a central database for access worldwide by police forces and military law investigators worldwide over the Internet. Any weapon that does not match its registered finger print will be confiscated and destroyed.

All weapons worldwide will be registered whether for military or civilian ownership. The new system will require of member countries of the UN to provide timely real time information. An country that does not provide such information is to be boycotted.

Don't believe everything that you read.

The Mathematics of Panic and the Mexican Swine Flu Pandemic

No one yet knows for sure, but the evidence is building that the Mexican flu pandemic is real and that it has had a three week gestation period beginning in earnest possibly during for the first week of April 2009. It may have spread out through people travelling away from the breeding wastes of several large swine farms at La Gloria near Mexico City. That is only an hypothesis. The big question is that, given present deaths in Mexico now stand at over 150, how long will it take before similar numbers appear in other communities across the globe. In other words, how long before you or I no matter where we live can expect to see the virus in our community. And, then how fast will the numbers of serious cases climb in Mexico as a potential pandemic gathers speed.

I have to say that the pandemic seems more than potential and that is why the potential for panic is as great as the potential for pandemic.

A rough calculation based on a three weeks gestation period for an area that has been saturated with the flu virus mutating and evolving suggests that not all those that have the swine flu virus will have the virulent strain. In fact, many case of the virus already reported around the world will have strains that have not yet evolved into a killer strain. They may never evolve into a killer strain and indeed may provide a means of protecting people from the killer strain or strains when these eventually arrive.

My very rough calculations of percentages for what they are worth would preliminarily suggest a 5 percent mortality rate out of those that have actually caught the killer strain and get seriously sick. This means that the figure for the total number catching the swine flu virus with all the other less dangerous strains could be a much smaller proportion, say less than 1 percent. This is just a wild speculation for setting out the arguments that a panic response may be more serious than the spread of the killer varus itself, at least initially, and if we are very lucky we may get immune to the killer strain by catching the non killer strain. Being or getting sick from the swine flu does not mean you will die. We do not know what the proportions are or will be. Some people may be already partially protected from less dangerous forms. We do not know what will protect from the killer forms.

As regards alarm, one should realize that those that will catch swine flu may be very large indeed, again I must emphasize may be, since mathematically we have no way yet of telling people more than that. This will lead to panic, and panic is morel Ikey than pandemic of the killer strain. As I read it, a pandemic of the swine flu virus is not the same as a pandemic of the killer strain the swine flu virus. Thus, you will probably survive the pandemic if you are reading this article, however you should be aware than you may still panic, and the panic may be more dangerous than the part of the pandemic of the swine flu virus that is not the killer strain. If you can understand that then you have the gist of my comments.

It is possibly the case that once people in your community have contracted the swine flu virus, you, yourself, will catch the virus in about three weeks even if you try very hard to avoid it. Be aware that many people may have to have the non-killer strain before it has evolved into a killer strain. Averaging everything out, the average person is safe, but there is a good chance lots of people will get very seriously ill around you.

Just keep your cool and do what you think will maximize your chances of surviving the worst. Get food and drink together for the long haul, get anti-viral cleansers, get loads of tissues and bags to dispose these,. Read as much as you can about how to protect your family and your community. Above all, do not panic. Survive by using your wits, and do unto your neighbour as you would they do unto you.

The New Stereotypes and Why They are Damaging

I see the creation of new stereotypes as a social process to give human beings comfort that they are addressing the ills of their world. The real problem is that the new stereos, many of them associated with bankers and banking, do nothing to help our situation other than appease our inclinations towards negative attitudes.

In essence, the main players in the unfolding of the financial crisis were innocent of a knowledge of wrong doing. Most were people being pragmatic within their perceptions of what the rules of the economic games being played out. They did not realize that the senior supervisory managers of the game were ignorant of the ultimate effects of the market game processes or had their heads in the sand. Our stereotype is, however, different in that we have cast them, all banking industry people, as willing participants in games of deception. That these stereotypes do not really apply to the vast majority of people in the financial world is too often forgotten in the rhetoric of politicians and housewives alike.

We have been through many histories of destructive stereotyping that has led to massive amounts of injustice to innocent parties. What we all have to presently endure is that the approaches of economic analysis that are presently in place worldwide are not sufficient to the task of understanding economic processes. The whole science of economics has to improve beyond its own stereotypes.

It is no longer sufficient to use the mathematics of economics to solve economic problems. There needs to be much more empirical and information gathering in economic analysis of forms that take into account the real complexities of economic and social structures. We are far down the ladder of solutions and need to climb into realism. Our shortcuts of analysis are damaging our people and communities.

The Continuing World Economic Crisis as Mistaken Identity

The problem with understanding economic problems is that there are many ways to analyse an economic situation. The leaders of the G20 have resolved that a multi-pronged approach aiming to end the liquidity crunch while amending the rules under which banks operate should do the trick. Do their efforts represent a real solution or are we seeing the playing out of another drama of ignorance about economic processes?

A feature of the G20 proposal is that it partly addresses the demands of Gordon Brown for stimulus while partly addressing the demands of European leaders for reformation of the banking system. It is wonderful rhetoric, but does the rhetoric contain the solution, or might one ask in all sincerity whether there is at this point a solution. In my view, this rather depends on your point of view and how you see the economic processes playing out over time relative to what you consider your ideal.

Its obvious that the main target of community leaders should be to minimize inflation while maximizing real growth in new directions such as to resolve other crises that humanity faces. The measures proposed in the G20 statement of intent will go some of the way towards resolving the different crises, but what will play out will be huge differences in emphasis in different countries because of their respective competitive situations and whether they are the initiators of the crisis or the unfortunate recipients.

One has to ask the question why the credit crunch. If one gets the right answers then it is possible that solutions may be found. However, if one asks the wrong questions or looks at the economic processes incorrectly, one can easily foresee a continuation of 'issues' rather than their resolution. In my view the wrong people are reviewing the financial processes and probably getting it wrong. This is not because they are not brilliant in the field of economics or finance as presently defined, but because the whole science of most economic analysis is built on mistaken identity based on stereotypes that no longer apply. Partly, we are all to blame because we believe or have faith in mathematical analysis as the end of the story rather than thorough examination of the details through time.

Mathematically, we can examine the economic problem from a macro or micro economic perspective. In conventional macro economics, it is not obvious that there was rampant and destructive inflation. What was overlooked was the disjoint between short term financing and long term need. The gap between the two was bridged by a false and failing macro economic approach. What was needed was a measure of processes of inflation that are socially divisive.

This was definitely overlooked by the IMF whose role it was to have such an indicator. Do you think they will advise on the correct measure of inflation the second time round. I don't, and that is a real problem for the world! Their macro economics approach is presently insufficient to the task. They need to get a better measure of inflation and act accordingly.

Another aspect of the G20 communication is that there needs to be changes in the rules of banking. This we would all agree. The problems we have identified are associated with leveraging, hedging, borrowing short and lending long (in all environments of immediate, short and long term financial markets), debt burden creation by not limiting loans to weaker segments of borrowing, arm chair banking at it very worse, disregard for prudent loan management. All these are, however, to misidentify the real problems, which I believe will be allowed to continue unless they are understood for what they are.

Economists are prone to forget the very close connections between stock market activity and money market activity. When both markets are structured in such ways as to produce instability from their very nature, this does not augur well for the economic system as a whole. I believe that the structural problems of the financial system have not been identified or are being ignored while the focus is on the effects of bad structure not the elements of bad structure that need to be address.

Yes, my dears, mis-identification is the order of the day, and habit persistence of bad habits will govern the greater mess me will be forced to endure.

The Case For Christ - A Review of Lee Strobel's Book

Lee Strobel is a well known and highly respected reporter, who has written many books about why Christians should continue to believe in Jesus Christ as their saviour and as authentic.

In my view, his case for Christ book has to rank among the best on the subject of the authenticity of Christ. His book outlines the failings of much serious research work over two recent decades to get a clearer picture of Christ beyond what was known thirty years after his death and carefully vested for inclusion in the New Testament over the century afterward.

The reader will find that Strobel's book is extremely well written and its conclusion very clear, namely that Jesus Christ lived and rose from the dead in a way that we would today regard as supernatural. The Christian story is of a miracle, a series of supernatural events that cannot be explained away by recent research. On the contrary, much of current work on the historicity of Christ that seeks to present an alternative view to that presented in the early days of Christianity fails on almost every count.

One is given such wonderfully presented information by Strobel as to conclude that it is worth every one's time to begin reading the Bible, if they have in the past failed to do so, because what Jesus says and does may indeed be supernatural and unique in the history of mankind.

Read Strobel's book and judge for yourself. I think he makes mincemeat of many weaker and falser claims by those wishing to destroy Christian faith.

Why the Present World Financial Crisis is an Opportunity

President Obama and world leaders came through yesterday and presented a wonderful opportunity for the young people to develop a new world order with a soundly based future that properly takes into account the numerous failings of excessive or rampant market growth.

My own research suggests that companies, and the human beings that drive them forward, are by-and-large opportunistic or paranoiac copy cats. Life is a competitive race in which people are likely to neglect the needs of others and they charge forwards to higher and higher levels of pleasure and satisfaction. Fear, as well as, fervour and lust are at the base of aggressive behaviour.

By change from competition towards competitive cooperation or cooperative competition, we can move closer towards more ideal forms of market and social development that recognizes our basic desires, but at the same time curbs our worst appetites. That is what communities and community communications could be designed to achieve. It would be much better for religions and companies to recognize that they cannot be overall winners. Organizations need to come to terms with living in a cooperative but still competitive environment. When governments recognize this, organizations can recognize this and eventually the people within the organizations can recognize this. It means that we need to have a human bill of rights that all governments, all organizations and all human being can be held to task on.

Once we have reached the goal of cooperative competition between human beings, we can expand our bills of rights to include all living creatures. There is room enough for every living creature once we get cooperation as a norm between human beings.

The Evolving World Economy

A consequence of the mistakes made in the financial sectors of New York and London would seem to me to be that their time of dominion is rapidly entering a new phase. If Britain and America engage in meaningful reforms of the financial structures, there might be hope of their lasting well into the future, however, the force of old habits and prior commitments to financing long term goals with short term money does not auger well for their futures.

The winners in our financial crisis should be those that can think into the longer term, not the thieves of our futures. There has to be a way for governments to redirect thinking towards long term views that build in low risk approaches to financing. It would better to have slower growth that is well founded in innovation and good judgment than to have inflationary growth that rushes into the future faster and faster as it heads towards a poor or tragic outcome.

What is Natural?

At a time when we see and hear so much about Charles Darwin and his wonderful life researching and discovering the origin of species, it is quite natural that one should ask what is natural. Well, we could say that what is in the past is natural. How far does that take us? Most would probably think that it does not take us very far. Can one say that what is in the future is natural? As one goes through this process of considering what is natural, one gets closer to the idea that there are some things that go well beyond the natural. Is it fair to add all these new things that we discover in the future to our category of natural. I have my doubts.

My inclination is to reject this notion of natural and think of the world as being supernatural. The category of supernatural for me at least includes what is natural and then adds to it. I don't think all the past was natural. One has only to ask what came before the past and one has no answer. What existed before the big bang and why was there a big bang? Its not satisfactory to me to say that everything after the big bang was/is/will be natural. My view is that all this stuff we see around us includes the natural universe plus a very large supernatural universe. Its not that I have any proof, but I am not going to wait forever thinking that this is all there is, or ever was. That would seem to me to be rather silly.

The Crash Georges

My pet peeve is that two Heads of State named George crash landed their economies, when they could have landed them much more softly and the world would not have to change so much. George Bush crashed his America and George Brown his Britain.

A consequence of George Brown's failure to produce a soft landing will in my view at this moment in time (opinions change) be the loss of the UK Pound Sterling as an independent currency. As the pound weakens because the UK financial is inhibited from crisis creation a benign consequence could be for Britain to join the Euro system.

Had Britain been part of the Euro system, there might have been greater sensitivity to the forms of inflation that are socially divisive, namely the inflation of costs of operating and owning a family residence. As it now stands, George is unrepentant in his mistaken view that his lack of sufficient understanding of evolutionary economics was not the source of the crash landing of the British economy.

Is the G20 Challenge an impossibility? Not yet, but pretty close!

Later this week the G20 meets in London, England under extraordinary security. Heads of State will discuss options for our future based on their assessment of the processes of economics that generated the present difficulties.

On the top of the list must be the future role of the IMF, and one can be forgiven after what has happened whether the IMF has been neglecting its mandate, which is to ensure that the world economy grows and inflation is kept in check. The idea may have arisen in many minds as to whether it is a failing of the staff of the IMF or its political bosses. Its one thing for staff to comment on what countries should do, but quite another to buffet the pressures of governments pushing their own agenda a views of what makes good world order.

The IMF Slept While Housing Inflation Raged in the US and UK.

At fault is the price index used by the IMF to assess whether inflation exists. A new index needs to be worked out that assesses contributions of inflation in long term investment forces, such as housing, land rental, residence rental and property. This is a minimum and security of pensions and of pensioners is at stake.

The main economic idea to be supported is that inflation is socially divisive and has in the past contributed to the deterioration of the social fabric of the period immediately before the second great war.

The role of the IMF, its primary role, is to ensure that the world does not deteriorate into stagflation that brings about international conflict in trade and investment, especially if such deterioration and conflict can be avoided by good economic policy.

Stability in the Housing and Building Industry

Its very strange that Gordon Brown should be mouthing off about how upset he and the people around him are about how profligate the banks have been. Going back in time, one can see that the approach of allowing the big five in the UK to lend to the housing market resulted in an over investment in that market relative to what could be sustained. Its fairly easy to see that liberalization of the banking system in this one aspect was controversial from the start as it was based on the wrong assumption that banks in the UK could lend long and borrow long. That is not the case. Even building societies have problems borrowing long.

The competitive reaction analysis done by Knickerbocker in the 1960's, by Gary Hufbauer in the 1960's and by numerous economists like myself in the 1970's, was suggestive enough that American banks would bring with them a competitive reaction relationship from the US and the very financial technologies suitable for America but unsuitable for the UK. The US banking system is vastly different from that of the UK and the rules that US banks like to follow are competitive, dishonest and legalistic rather that cooperative and honest as in the UK. In essence, the British banks increased in number as Building Societies became banks. The ethics of British bank fell prey to the lack of ethics in American banking. The US disease has been seen around the world and suggests that we need to move to remove the sickness of doing what is legal and replace it with doing what is good for everyone.

At the very least, the OECD technology wing should study the competitive situation in banking systems of the members of the OECD and come up with proposals for reform.

Stability in World Banking and My Recommendations of Starting Steps to Achieve it

It is fair to say that people are holding too much debt. Much of existing debt needs to be written off, but it needs to be done within a cooperative frameworks rather than competitive frameworks. Under competition, banks will gobble each other up as they dishonestly portray their financial situations. Camouflage and obfuscation is the 'order of war' between banks. People will be thrown out of houses to make balance sheets look good!!

1. The OECD should study the technologies of the banking systems and make recommendations based on high technology considerations.

2. The OECD should also study the nature of banking sector risk and make recommendations regarding what forms of hedge funds would be permitted based on risks of the forms we have seen and based on simulations of potential industrial growth permutations.

3. The IMF should reexamine the role of the SDR as a commercial medium of exchange and store of value. The US dollar as a stable unit of account is exaggerated. The Chinese, Brazilians and Russians are quite right in asking for a basket of currencies, and in my view it should be the SDR.

3. Oil and energy taken from the ground (gas, petrol, wood, and other contaminate) should be priced in SDRs. The IMF should regulate these pricess to ensure the environment targets, what ever they may be, are met. A proportion of the revenues should go to the IMF to help finance solar energy and clean energy production in small economies. Energy from the sun should be priced in the currencies of countries of source.

4. A better approach for housing finance is that certain debts be forgiven over the long period on a sliding basis. What should happen, in my humble view is that all housing debt after 2004 be locked in at fixed rate of two percent and the 60 year maturity assigned. Each year thereafter the maturity of the loan should be adjusted forward by one year. After fifteen years these loans should be reviewed and differentiated between manageable and unmanageable accounts. Those that cannot afford their properties should sell them and move to other locations.

5. All new loans for housing should have a fixed interest rate of greater than 2 percent. All borrowers should be allowed a single multiple of 3.5 times current annual income, and married couples 5 times joint incomes. Capacity to repay should be the basic rule.

Wuh Lax Rules

1. Don't smoke... ever!
2. Drink only in moderation, and keep as wheat free as possible, for health and nourishment.
3. Be as honest as you can be in all things.
4. Treat others as you would treat yourself.
5. Exercise as often as you can.
6. Eat only when hungry and eat for health and nourishment.
7. Talk when spoken to. but talk in moderation and listen attentively to others.
8. Remember that people are varied and enjoy them as you would good books.
9. Rest often and be tranquil frequently.
10. Avoid profanity.
11. Cultivate friends assiduously.
12. Try working with those who oppose you as your preferred option.
13. Find out new things by figuring out the universe.
14. Create novelty and be inventive in your attitudes and attempts to master new skills.
15. Do voluntarily give up.

The Real Losses During the Present Financial Crisis

Strange isn't it that when everyone is looking at stopping the bonuses at AIG as a moral issue, the people at AIG and administering the rescue package see it as a competitive issue. We have to pay out the bonuses in order not to lose the brains behind financial market turmoil. These precioiusly smart individuals have to be kept within the fold of American industry. This sounds a bit like the retention in the United States of German military and bomb scientists after the war. We can't let destructive genius escape into the void. What the administrators of the rescue packages appear actually to be saying is that the destructive scientists will or could come back and beat us at our own destructive games! The real loss to America is, however, that the destructive games will not be stopped because the country worships them. They represent its new and resident gods, the 'now' gods of financial warfare.

America - You can't handle the ........ competition

The present financial difficulties of America and Great Britain are far more serious than most can imagine. I use the verb 'can' purposefully. Our difficulty is that we have now got used to the conventional explanations for the weaknesses of these economies. The usual story is that the housing markets got over blown and because it was insured by AIG this meant that AIG was vulnerable when the home loans started to go sour with a slow down in the growth of home loans, house purchases, construction of new homes and what fills homes.

Money was poured into AIG and the businesses that were insured by AIG. Those financing the stock market, however, realize that the 'real' problems go much deeper. There are many many people who know, not just suspect, that getting the financing right for home loans does not solve the extraordinarily deep problems that America and Britain face. President Obama last night on the Jay Leno show intimated that the collapse of AIG would bring down the financial markets and that this would lead to a main street collapse, as well. Few doubt that he was wrong, but many know that the solutions presently in place are definitely not getting to the heart of the problem especially if what we are seeing is inherently structural in nature and not tactical.

My thinking goes to the heart of the problem which is that the strategic games being played by banks changed fundamentally during the 2006-2008 period into one of 'anti-competition' and defensive realignment. At some point during the recent period, some banks assessed that it was in their interest to create a bit of creative destruction by innovating in the 'scale of operation' game, the Walmart game, but within the financial sector.

This new development, which has been brewing for decades took a very serious leap forward when the deposits needed to play the game gave it an ominous character. Defending 'your' bank against acquisition by another required raising the stakes and borrowing more into riskier and riskier ventures of acquisition. Inherent in this game was cheating and lying, falsifying a bank's true worth, hiding operations from competitors view, creating deliberate confusion and confuscation in order to survive as an independent entity.

An explanation for banks being unwilling to lend to each other could be that they do not trust the credit worthiness of other banks. My view is that the problem may be far deeper in that banks do not want to lose in the restructuring of the banking system, its consolidation into fewer and fewer banks.

That this problem exists in both the United States and Great Britain cannot be escaped. It obviously exists across the world financial sectors. By putting more liquidity into the system, the authorities may be accelerating and enhancing the odds for those most active in this destructive game. My dears, the money that is going into the banking rescue is not for the rescue at all, but for the freeforall of debt creation as banks gobble each other up.

The Insanity of Borrowing Short and Lending Long

I was going to entitle this blog "Take Banks Out of Home Loans." My logic is that if we don't remove banks from the housing markets around the world, we will descend into another sick period of international violence. There is no logic that tells me as an economist for over forty years that the banks can finance home loans.

Banks really can't, and its obvious that the liberalization of financial markets in such a way that banks participate in lending for housing predisposes them to excessive over investment.

End the competition between banks in that sector and one ends the economic insanity of land price inflation that destabilizes democracy. We know the experience of Germany with its inflation in the 1920's, where it led and the insane demands in Germany for living room. We can see how lending for homes and bank financed 'illegal' settlements in Israel destabilizes the balance between communities their. Which banmk is going to take the greaterst risk? Who is financing conflict between communities for land and homes? There are countless experiences of stock and house price inflation linked to competition of bank lending for home loans.

History will repeat itself in many communities and the world community unless we take competitive banks out of the business of borrowing short and lending long.

In USA and UK very few banks finance for the long term. They may lend to consumers but they ask for, no they demand, a variable rate and revision of terms and conditions whenever they see their margins falling. It is insane to expect banks to borrow short and lend long. They just don't do that.

Our big problem is that Governments often make it too easy for banks to get into problems of cash flow. Governments don't allow banks to fail because banks are into the long term loans where they have no right to be. If governments allow banks into long term lending and variable rate financing they contribute to the subsequent squeeze of banks against the non-banking sectors after periods of excessive borrowing by buyers competing on terms of loans that they have agreed with banks.

The banks that take the greatest risk beat out those that are careful lenders. Prudence in lending is thrown away in attempts by competitive banks to stay alive. Banks will borrow to buy other banks and those that take the greatest risk contribute to the highest extremes of asset price inflation. As short term businesses, banks cash flow issues arise first. They then pass their problems onto the real economy main street. In fact, they can create many of the problems of low investment in the real economy main street by increasing the uncertainty of investment in the main street.

Liberalization of banking systems around the world has increased uncertainty and produced the basis of inflation of land values, real estate, and stock market excesses. People have bought more than their incomes can support over the long term. Everyone engages in the activity of borrowing short for long term assets. Insanity. It is insanity!!!!!!!!!!!

The Breaking of Boundaries

Throughout history, there are individuals that break boundaries. Such individuals are most often capable of perceiving the nature of a boundary, just as clearly as most people can perceive the presence of a wall that represents a barrier.

Occasionally, people perceive the limits of a current ethos of thought and its progression over time. Such people may be able to alter the ethos in such a way as to change the progression of history for better or worse. At the heart of ethos changing are words and actions by individuals. Their words and actions are interventions to correct the direction of progression of human affairs. Although very abstract, the interventions and the perception of hidden boundaries in the historical dynamic become realities with enormous consequences.

Why individuals should be able to perceive boundaries is interesting, but why they should also be able to perceive ways to alter these boundaries permanently is much more interesting.

Occasionally, the boundaries broken by individuals are unique to the characteristics of the individual as if given an opportunity that has consequences beyond anything imaginable. Some people change the course of history, occasionally without realizing what they are doing, but some times well aware of the impact of their actions.

What results from boundary breaking are events, many events, that run counter to what would have been. Historically, there is an enormous disjoint between the beneficiaries of significantly wonderful and well perceived boundary breaking interventions, and the awareness by people that an intervention has even taken place. Thus, on the one hand there is the myth that individuals do not matter, and this idea runs counter to the notion that individuals do indeed matter. In any event, there is always within the human experience those that attempt to minimize the consequences of those that perceive boundaries and how to alter them for the benefit of others. Such interventions are perceived as moving arrangements between individuals in ways that are intolerable.

The historian, novelist, news writer, lawyer, columnist attempts to redress the imbalance between the consequence of individual action and lack of recognition in the many arenas of human fact sharing. In an important sense a missing recognition of the king pins of benign change are a loss of value in valuation and a breaking of the contract. Without recognition of these contributions, there is a cyclical process in human affairs that allows bad things to continuously repeat.

On the Nature and Significance of the Christian Experience

At the heart of the religion that is available as Christianity are two very important components. The first is historical and the second is mystical. Ignore either of these components of Christianity and one might as well ignore the nature and significance of Christianity. Christ and the cross are both symbolic and historical.

On the historical side, Christ represents an intervention into history of a force that the universe has never before experienced. The intervention is nevertheless very small relative to its impact within the universe.

At the most, it physically represents a life cycle of a human being that creates a cross roads in human affairs. At the least, it conceptually represents a mystery intervention, a thought by an individual human being or a group of human beings that has the power to transform human society and through human thought the universe.

What Christ did was create meaning, and so much meaning that the course of history was changed. He may have only pulled together the ideas of others or expressed the ideas of others, but in terms of what he did, his actions were a spectacular intervention in human affairs by a single individual which would have consequences well beyond that of the individual. In this sense Christ is at the crossroads of human history and represents a significant departure from human business as usual.

Whether one believes that Christ's life, death and resurrection were real or imaginary does not matter except to ones participation in the processes of the intervention. One can choose to opt out or opt in. Christ demands that one opt in showing clearly the rewards of participation. Nevertheless, the process of participating in the consequences of Christian intervention are very abstract and personal.

The personalization of Christ within the hearts and minds of people who know of his intervention whether divine or not, is very real and allows for the interaction of human beings with abstractions that don't really exist in terms of human expectations of what physical life and death are all about. Christ has sent a message that rings true through the ages and it is the communication of this abstract idea about love and self sacrifice that sets an eternal standard for human conduct and experience.

Christian communications now pervade on different levels of society and a vastly different scales, but the challenge is always to recognize that a single human being at a point in history intervened in a significant way.

The relationship that one assumes regarding this fact defines whether or not any individual will maintain a contract with an abstraction, a fact of intervention in human affairs.

In either event of maintaining a personal contract or not, the effect of Christ's intervention is perpetual, irrefutable, and highly effective. At the heart of the Christian message is the notion of self sacrifice in order that love might prevail throughout the many arenas of the universe. One's notion of what that love is may vary over time or between individuals, but the idea of self sacrifice is inherently irreversible.

How should one view coincidence?

What is coincidence? Is it something important or an annoyance about something we don't quite understand but which will be explained later on? Is coincidence a result of our engineered world, the world that man has created and can see or measure, or is there something that goes much deeper?

Some authors claim that coincidence is normal and that our world is somehow small or getting smaller, that we should be able to see coincidence a not much more than an engineering phenomenon resulting from purely physical laws. The problem with this logic is that it begs a question as well as throwing the baby out with the bathwater.

One of the great steps humans have made is to understand the nature of such phenomenon as electricity, radio and microwaves. We now have a strong body of science that shows how things work at the minutest level. Along with this growth of knowledge and technology, there is growing scepticism about unseen forces. We only have to look around us to see that humans engineer unseen forces all the time, that man has become master of a world of unseen capabilities allowing computation and control. What we cannot see, many will not believe. What their parents did not see, they can't either.

Along with realism and inherited habits is a flood of scepticism. We have not got to the point where the human mind seeks to know for the sake of knowing. We think and say that we have an inclination to understand a greater reality, but in everyday reality our scientists confine themselves to small enclaves of scepticism within which all is comfortable and tidy, even when our reality tells us that nothing is comfortable for long, nor neat and tidy for long. This blinkering of our willingness to be out of the box confines most human minds to the box.

It is normally too much effort or costs to much in one's career to try, even try, to think out of the box. It is easier to be told what to think, not have to think. We want to believe a reality in which we are with the majority. Most people, for example, cannot believe in a reality that has not be condoned by their parents. They say for example that smoking is good because Dad or Mom smoked therefore it will do me no harm. By not thinking out of the logic boxes of their parents, people lose their longevity. They die sooner than they should. They give up sooner than they should and they are less than they can be! I am reminded how hard it was to get people over forty to use microcomputers in the 1980's.

I am not saying that people should not try to see behind coincidences. I am say that the observation of inexplicable coincidences should not be reduced to mathematics. Coincidences are not mathematics they are physical events that happen for very real reasons. They point us in the direction of forces we don't believe in or which we would never have conceived.

In the practical world all this about coincidence has relevance when we cope with coincidences that are the result of strong physical forces. Think how hard it was to get economists to use non-linear modelling techniques even though the world is almost totally non-linear. Think how hard it is for ordinary people to see the work of inflation and understand its implications.

Our reality is that we see coincidences, but fail to understand them as the work of cooperative or competitive underlying forces. We see people dying from the effects of smoking cigars, but don't connect this with people dying from the smoking of cigarettes or pipe smoking. Because not so many people die from cigars relative to cigarettes, the deaths from cigars may be enormously underestimated. The reality is different and the coincidence of a relationship is of a stronger association than our minds lead us to believe.

Associations are coincidences that we observe most of the time. Factorial or canonical, geometric, indirect, and non-linear associations we don't observe and they don't appear as coincidences. Such associations can be deadly yet we ignore them because our minds do not see the coincidence.

The coincidences that we can see provide us with opportunities to understand associations between things or realities and non-things or non-realities, such as abstractions. For example, God is an abstraction to most people. What we associate with God reveals many things about how we approach our realities. If there exists a force that is an abstraction, we may or may not be aware of it because we do not understand the coincidences that this force produces. Thinkers such as Arthur Koestler and Rupert Sheldrake are controversial to those that think of the universe as being very tidily physical and a result of natural engineering.

Associations that include messy associations such as hidden unknown forces do not conform to existing physics and prevalent ways of thinking in institutions earning their bread and butter from salaries of patrons convinced that physical truths are the end of the story.

Although mathematics is used to dismiss coincidences, often the mathematics is flawed and about as good as the mathematics of hedge funds, and you know what happened there. Mathematical statistics itself has multiple schools. The improbable does occasionally happen and when it does it changes everything. Yes, California will get its massive earthquakes and Florida its great floods even though you or I may not ever live to see either.

What is meant to be may very well be!

When I say that strange things can happen to me, I mean very strange. One as myself thinks of these strange things in terms of mathematical statistical probabilities. Then there are those events that blow statistics out of the water because they should not happen yet do happen.

For example, I gave my cousin John my telephone number in Florida. He misdials the number with one digit a 5 instead of a 3. He asks for me, and the person at the other end, a complete stranger in a state where I rarely travel tells him that he knows me. My cousin remarks that this is a strange coincidence, and that he is hot on the trail to locating me. However, this coincidence does not really help him because the person he is talking to does not know my telephone number nor how to reach me. He just knows that I exist from a relative of people who are staying with him and that they have spoken to him about me. End of story, or perhaps you would think. My cousin has to give up because there is no way to reach me. I have changed telephone numbers and no one knows the new number.

Meanwhile, I thinking that I must get into contact with my cousin do not know his number either, but he is staying with friends who send an email to me. I do not receive the email until Saturday, a few days later because I have not had a telephone number nor internet access. When I finally get a phone number and email address I open up my email to find that my cousin is looking for me urgently. I phone the number in the email and get in touch with thy cousin, John. I give him my new address and tell him to come stay a while. You would think the story would end here, but it doesn't.

On arrival, at my new address, my cousin, John tells me that he tried getting me, and that he had somehow misdialed my telephone number and had spoken with someone who knew me. This is very strange because the people he spoke with who knew me are from England and the only reason my cousin spoke with them was because he misdialed my temporary number by one digit.

All the above, I have verified. Its coincidence enough that I should be in Florida from Canada at the same time as people I know are in Florida from England, but that my cousin, who knew me, and was on a short visit from Michigan should talk to complete strangers who knew me. Well that is a second coincidence. It is strange that these people should actually have talked about me to their friends, the people they are staying with in Florida. It is a third coincidence that he should misdial bby accident and get a working numbner at all. He could have dialed the number correctly and just given up. It is a fourth coincidence that the number he should misdial would be one digit different from the number that I gave him by email more than a week earlier. It is a fifth coincidence that the numbers in Florida should be so close and the locations where I am visiting and my English friends are visiting should be so close.

I never spoke to my English friends that I was staying in Florida temporarily and they did not book a vacation to see me. That I am sure. However, by a sixth coincidence they had a meal with cousins of mine from Sidmouth in England about one hundred miles away from these friends and one of the friends is a niece of my cousin, Dorothy. Dorothy sent me an email guessing that the place where we were vacationing in Florida was the same as her niece aand husband had chosen to vaction at the same time as me. When I looked at the email from Dorothy this morning I noted that the Florida telephone number Jenny had given her was one digit different, but this not after I had phone Jenny's number in Florida.

That is the final coincidence because I had little intention of phoning that number thinking that Dorothy's email message was a very long shot and that in any event these people would have returned to Engl;and already.

Something this morning got me to read my emails, call Jenny's number in Florida. I had no idea that it was her friends that my cousin John had spoken with. Jenny was surprised to hear from me but less surprised than John to hear I had someone in Florida who knew me. She immediately told me of John's call to her firneds.

So the circle was completely until I checked for the coincidence of the telephone numbers and tied the whole thing together.

I have now to cope with the strangeness of these events and try to interpret some meaning if any. As you know, I do not think that things happen coincidentally, but that there are unseen reasons, unseen physics behind everything. Nothing is by chance. What we don't know is the extent to which events happen because of serious forces that are hidden from view until revealed by our meager logics.

A Visit with America's Tulip King

Not only is Jack the Tulip King of America, he is the country's largest breeder of Dartmoor ponies. Yes! Jack is trying to save the Dartmoor pony from extinction by breeding them himself in South Carolina. Nestled in the beautiful foothills of the mountains, Jack's small holding supports what has become a valuable contribution to saving the Dartmoor pony as it struggles to retain its original breed. Prince Charles of England declared that the Dartmoor pony was endangered and this got Jack all eager to save it. What can I say about such an effort other than it merits our support.

Jack sells tulip bulbs to make a living and by planting these we can help save the pony and Jack's business as he struggles with the current depression.

What's New on Wooooooh's Stream

Fact is I have had a jolly good vacation while the world fell apart at the seams, or so it seems! Pun intended. My thoughts on what and why this has happened are unprintable.

I do have strong opinions about the post Thatcher and post Reagan changes in the financial sectors of both USA and the UK, that leveraged the property market. The fact is that these are war economies and so deserve special attention.

I do feel that the consumer price index should include rent on land and appreciation of land, after all, is not that what communism was all about.

Now that the weaknesses of both systems have been revealed to revolve around the value of land, we can have a better idea of where to reconstruct both.

What is printable is that there are obvious solutions, even though these promise to be painful. What I see is a severe mathematical disjoint between incomes and debt. Normally economies meet this change by means of the price mechanism.

The problem with the needed price adjustment is that its effect would be to slow activity in areas where activity has been compressed within time just as the price rises of the past decade have compressed activity forward in time in certain areas such as housing and consumer capital items (such as, furniture, heating and decoration).

It seems obvious that what will happen is a reallocation of incomes coming from different areas and capital going into different areas from what we have seen.

The stock market and related economies will continue to grow but some sectors, formerly starved of investment will receive investment while other sectors that have received too much investment should receive less.

The oil sector is grossly over invested as is every item that uses oil, so this sector needs to be starved of capital while the solar sector needs to receive capital.

The World's Greatest Challenge is that of Changing Decades Old Habits of Energy Use

We are all user's of energy and we have fixed habits in the way we use energy. This is our greatest challenge, our natural reluctance to alter the amounts and ways we use energy. We have not even accepted yet that we need to change our energy habits. Many newly elected governments are not yet pulling their weight as regards telling the truth to their electorate. Statesmen, like Stephan Dion of Canada, who tried to tell the Canadian people as it is, can be laughed out of a serious role in political circles where they could be extremely value because they see the very real need to alter our habits even if it is costly. We cannot avoid the costs and we need to educate people that these costs are coming down the track, and if we don't the costs will make our present recession seem like a vacation, a play day.

Europe took many decades to set its habits in a somewhat energy saving mode, but North America is decades behind and still unwilling to see the facts staring at them. The very real facts that their economies need to move in very different energy producing and consuming directions. Instead we have insincere people leading what has become a multi-ring circus of dishonest game playing about energy. There is such a lack of consensus in North America about what to do and how to go about it.

Stop Your Negative Thinking Now

A consequence of the stresses on the world financial and economic systems that we see all around us is the rise of negative thinking. What many don't realize is that the financial patterns that we are presently seeing have been evident for some long time. They are not something negative, but a new pattern that is positive. The earlier pattern of inflation of excessive spending and spiralling house prices was actually the negative pattern. That is now ended in the US and thank goodness for that! Talk about living in a dreamworld!

The collapse of that pattern and its replacement with a process of necessary correction is a positive thing and will help the younger generation realize that things do not come as easily as they have been led to believe. This reassertion of the real values of our universe, is a wonderful expression of its ultimate vitality. What we were seeing was market-led injustice. What we are now seeing is a necessary realignment of values.

The fact that America watched Asia have its crisis in 1997 and did little to change its own ways are an important lesson for all of us. The Asian crisis was in reality an American led dollar crisis, and we can now all see that. That is a very positive step to Americans realizing that they are not the creme de la creme, but a part of the whole, and a declining part of that whole. Now as we watch other peoples realign, we will see more clearly the mistakes of the Bush administration, the lack of understanding by Bill Clinton of the economics of his success.

We see more clearly that all sides were most definitely wrong, and we see that it is now necessary to keep inflation of all kinds down otherwise we risk a rise of the second stage of depression which is anger and intolerance. I myself, sleep much more soundly now that the crisis is over for the crisis was what went on before and not what is going on now. Sure the world is in pain, but it could be in so much more pain down the road, should the old patterns of profligate spending not been arrested.

Now is the time to embrace the message that Obama is stating, and that is one of social justice. This does not mean that Obama got the pattern right. He most definitely did not as the McCain people so clearly show. No one in America has the right now to point the finger. All were within a destructive process that leadership at the FED failed to recognize and act upon.

We are suffered from a lack of direction on the part of the US monetary authorities, who go it wrong and should have known better! Lets hope they can end this scourge of inflation while we invest in a new energy paradigm that is self sustainable and based on what flows from the sun rather than what happens to come from the ground, or from inside the molecule.

The Pain of the Straight Line

Those who know me will understand when I say that the anathema of modern civilization is its obsession with the straight line. For me, the straight line is associated with the rise of Roman thinking, an obsession with directness and a failing to understand other forms of line.

As the straight line was absorbed into the world as a dominant form with the suppression of other forms, civilization began the road down to evisceration and self destruction. For me the straight line is so closely attached to death that it is synonymous with dying and self elimination.

We are impoverished by the dominance of the straight line and when ever we add curves we are enriched. Why is that? Why do so much of us live linear lives? Why are so many of us impoverished by the straight line. You may not know what I mean, but then you are on the straight line of your life and if you remain on it you are approaching, well whatever! Put a mirror in front of yourself and ask whether you see any straight lines. Your life is based on nature making curves, so why are you so obsessed with the straight line.

Why is the Roman logic of linearity captivating your soul. Consider, is the straight line evil, or painful, or dangerous, of hurtful? I ask you to add a curve or two and to start to live more universally. Get off the straight road and breath life. See the other patterns out there. Forget the straight lines and see the beauty of the curve. Allow yourself to be inspired by the charm of indirectness, captivated by the novelty that is contained in curves. Be yourself as you can be. Live your life more eternally. Don't die on the straight line.

My Auntie is One Hundred Years Old

As of October 15, 2008, I have it on good information that my English auntie is one hundred years old. Time to celebrate! Good luck and congratulations, Auntie Stella!

The Challenge of Economic Adjustment and What to Expect

For a simplistic explanation read my comment!

Explanations of the present worldwide financial crisis are not so clear as to the adjustment process. Was has happened is the United States and many other countries have over invested in their respective domestic housing markets. This was made possible by lax lending practices which did not adequately take into account what borrowers could afford throughout their borrowing period.

Obviously, to make the financial equations balance either peoples' incomes have to rise, or they have to pay out so much of their current incomes for their mortgages that they can afford little else, or they have to receive further loans at concessional rates, or they have to rent out part of their homes, or they have to sell their homes.

To mitigate the overall problems, governments have decided that they will help out by making available more money at concessional rates so that more people can hang on to their homes. What happens in reality is that people try to make ends meet by getting better paying jobs, by getting second jobs, by working longer hours, by divorcing and selling their homes, by declaring bankruptcy, etc.

In some communities, banks have allowed people to remain in their homes but become shareholders. This seems like a reasonably good solution since the debt of the bank is no longer a purely bad debt, but an asset of lower yield, i.e. lower profit. The problem is that the banks have sold on their loans to other entities who are not in a position to dictate the terms of shareholding in the housing market. Indeed in buying the 'housing' paper, speculative buyers, which means banks wishing to convey at the time to others they were in the 'profitable' housing market, leveraged themselves into a crisis. But, what if the original lenders were required to buy back all their housing loans that did not perform! At least then there would be some accountability.

The impact of over-investment in the housing market, which is a long term market, is probably over investment in almost every other market, especially the longer term markets, such as vehicles and all what fills new houses, such as furniture. What this means is that the value or prices of the product of these over invested markets will decline. Those that have over invested will probably under invest as a precautionary rule. This means that the recovery out of this period of over investment could take a very considerable period.

Meanwhile governments will try by various means to soften the impact of recession. If they soften too much people will continue to over invest and a correction to sustainable investment will not happen. That is the problem of low interest rates and easy money. It encourages over investment and pushes against correction to sustainable spending and investment.

Perhaps, if governments focused on redirecting the economies towards CO2 saving industries where there is now under investment, we might just be spared the repeat of over investment.

My Political Leadership Wish List

If the last few weeks of turmoil and bubble bursting have taught us anything, it is that economic, financial and political policies of communities and governments do matter. The failings of the leadership of Blaire, Brown, Harper and Bush are now very apparent. The most obvious fact is that they need to seriously re-read the histories of their own countries to understand what they did wrong. Perhaps, they should also take courses in ethics. This is so they don't embarass us when they write their memoires.

I don't think they should write autobiographies or memoires until they really understand how serious their failings were for the three countries they led or continue to lead. They should pay particular attention to the interwar period and try to understand the way things work in desperate societies and why they now have contributed or continue to contribute to the creation of a world environment that is poised for religious, social and then nationalistic warfare. In my view, they do not understand the sources/causes of war. This is why they really need to go back to school so that they can see the extensive damage that they have done.

Of the present candidates for leadership of the free world my present preference is for Dion (Canada), Obama (USA) and Cameron (UK). What strikes me about these candidates is their honesty, sobriety and genuine ethical approach. What worries and worried me most about the Blaire, Brown, Bush and Turner leaderships was their dishonesty. It seems/seemed as if they are/were caught up in a world that they do/did not really understand.

I am particularly distraught about the contradiction inherent in the right wing religious community of USA, which espouses the minimalization of government while promoting ideologies that promote the intrusion of government into everyday life and freedom of choice. They say governments should be reduced, but want governments to expand and then behave as though they are religious communities at war furthering obvious religious goals, such as have to do with reducing the influence and freedom of genuine scientific research while supporting rearmament, disengagement, warfare, prohibitions and ever more dangerous weaponry. By preventing the normal evolution of positive and open value development, they foster an ever more dangerous hidden criminality of mentality. Though they don't bless it, they undoubtedly do lead to its increased likelihood. By supporting gun ownership, they increase the role of government in defending people's rights and a growth of governments and related agencies focused on security and control. They see people being shot in the streets with guns that people should not own. They don't mind gun ownership and they let the fear mentality of gun ownership to dominate the mores of American society. In effect, they bring the old west mentality into an otherwise ethical modern society where it can do serious damage.

Starbucks Coffee Shop - Blueberry Bar

Since I don't eat wheat, it was a shock for me to see Starbucks in Ontario selling donuts with their coffee. It seems that Canadians cannot get away from their favourite food fifth column.




If you don't think that donuts are bad for you, perhaps you are a bit of a carb addict yourself. In any event, I enjoy the Starbucks blueberry bar, and when I don't see it on display, I do ask for it and have not been disappointed in Ontario, yet! So far, I have not detected any digestive problems associates with any wheat lurking within the bars. I do believe that blueberries are cancer fighters, and that oats are good for your heart. The coffee contains caffiene, which helps keep me alert, but I think it dries me out a bit, so I also like a glass of cranberry juice with my meals.

A Personal Review of Tim Horton's Coffee and Donut Shops

This morning, I tried very hard to find something at Tim Hortons that I could enjoy because it would not make me either sick or uncomfortable. Most of the products at Hortons make me ill because my body cannot tolerate the wheat that seems to be in everything they sell! I think all this wheat in the form of white stuff is bad for one's health.

My choice was coffee with two milk and one sugar, plus a side of hash brown potatoe. I find the coffee at Hortons fairly acidic so the double milk was intended to offset that. I was risking wheat being with the potatoe, but thought it might be worth the risk.

Everything went sour when I noticed the 'chef' touching my hash browns with her fingers. I did not order germs, so was a bit put out. The coffee was tolerable and it really did give me an energy rush for my bike ride. I left the hash browns because its not a good idea to eat food that others have touched with their fingers.

By all means have your coffee break, but I would do a cycle around Tim Hortons to a place where the coffee is better tasting, has more aroma, and seems fuller. As for the finger work. Who asked for that!


Incidently, I tend to prefer Starbucks coffee, which is better from filler, taste and aroma aspects, and I find less acidic. The oceans have too much acid so why do I need it also (a stupid non-sequitor!).

What Leveraging Really Means to the Average Person

Excessive leveraging is what the Reserve Requirements of a Central Bank are supposed to limit. Obviously, there has been a big failure to communicate and inflation of house prices and stocks over the Bush period has been rampant. Without adequate Reserve Requirements throughout banking systems the US and UK will continue to create too much credit, and their currencies will weaken unless there is real economic growth, which is not likely in this holding period of adjustment.

Obviously, banks need to exact adequate reserve requirements (deposits, lower multiples of loans over income, percentage of income paying for interest and loans, etc.) from customers or they will fold like the economic system is folding right now. If your present loans are more than three times your salary, you should cut back spending or liquidate shares (i.e. loans to companies) to pay your loans down, no matter what the favourable interest rate, dividend percent or capital gain expected. That is prudence and not recklessness as has been common over the Bush administration period.

The problem is that more credit has been created over the last decade than what combined incomes can cover with interest payments. To get back to order, people need to sell assets, such as stocks and shares, houses, and liquidate deposits paying off their debts or as much interest as will keep the creditors happy (pretty high now!).

When this does not happen the debts become bad debts and the banks have to declare that they have bad debts. If everyone has bad debts at the same time, the assets that the bank is using to recover bad debts such as repossessed objects and homes fall in value because everyone is selling stuff at the same time.

When the Fed helps the banks it does not mean that the bad debts disappear, but that the fall in asset values is more orderly over time as sales of assets progress. Prices of stocks and shares, houses, and other assets will continue downwards until the full correction point has been reached.

For the average person, this means that the sale of a property that cannot be financed can to be delayed on a downward moving market. The problem is that people will race to sell while the market is on the upper end of its downward slide. Furthermore, people will delay acquisition of assets on a market moving downward because they prefer the higher valuation. There is consequently no easy solution, just the mathematics of human and market behaviour.

We do not know what the full correction point is, but one can be suspicious that the leveraging went forward some seven years beyond reason. So perhaps values of the past seven years adjusted for some small growth in value would appear to be about right. Not very nice, but more stable than continuing to live with the fear of a rush to sell rather than more certain modest growth in value! The appropriate correction period is the next nine months not years from now as the bad bailout dynamics might induce. Laws and money cannot really buy US banks out of stupidity, just time so that they can become smarter investors in people and assets.

Sensitivities

Each morning, I have been in the habit of taking my bike for a ride to Lake Huron and along the coast. The past week has been amazing. Temperatures were around 70 degrees fahrenheit, and there was just a slight breeze.

The sun broke through the leaves of the tall oaks splitting a hundred times within the woods to create a dazzling array of little lights and many shades of green. Acorns fell spontanously and seemingly dangerously from lofty branches a hundred feet overhead, smashing with a hard cachunk on the pathway and anyone or anything below.

I love to watch chipmunks, and these were really having a wonderful time, very excited by the warmth of the day and full of fun.

The Numbness That CNN Coverage of the Credit Crisis Brings to One

I have yet to decide whether it is the way that CNN covers the news or the news itself. Either way the CNN news and coverage of the attempts by Congress, the Fed, the President and the others to 'save the American main/high street and Wall Street' leave me quite numb.

The bottom line to me seems to be that leveraging of debt by all entities in the US and UK economies reached record levels growing alarmingly throughout the Bush administration period. What is clear is that nominal incomes of individuals and companies are insufficient to meet the requirements for interest payments and that the leveraging is collapsing everywhere like a deck of cards. One is quite foolish to think that such a collapse can be paid for by further leveraging by the US congress.

The fact is that the US and UK economies are now so highly geared up that a big crash in confidence will follow in October 2008. During the remainder of 2008, the result of this excess has got to be pressure on interest rates otherwise the result will be inflation during 2009, further job losses and unions pressing wage demands.

What could happen is all out war within society for what remains of income streams after the best creditors have had their share.

Can we really believe that the lenders in Asia will want to lend to dollar holders?

Finally Hope of Ending the US Economic Depression

My take on the credit crunch and the failures of US banks and banks that had bought into the speculative excesses of the financial markets is as follows:

Dance in the streets. Why? Because we are witnessing the unravelling of a monster misguided and misdirected economy that was leading nowhere but greater uncertainty. Based on bad economics and technology, the US economy was a disaster waiting to happen. It has to happen so that we can see the US economy rebuild itself, just as it will rebuild the twin towers, but rebuild on a sound financial and energy basis. We may be seeing the shock that will lead to sounder economics and financing and better energy technologies moving away from those that are based on oil, gas, coal and nuclear energy. Hopefully, we won't see nuclear plant shipped around the world in big lead boxes!

Go Green. Why? Because we have the opportunity to end the conflict with Russia and get rid of those insane Bush energy and war causing policies that are driving us into further war. We need to develop vehicles based on electric engines that will completely remove the need for oil from the middle east and reduce the pollution that is poisoning our children's future. GM is on the roght track with its strong battery technologies. We need to buy into the new technologies quickly and adopt solar, wind and water based turbines for the home that can produce the electricity that will drive our motor bikes and small vehicles. Give the middle east a break and go green.