Flouncealikes

What the blackbird said

Every morning, a blackbird in our neighbourhood starts to sing. It begins with two distinctive melodies, and then (like Eric Clapton in his Cream days) improvises beautiful, complex variations on these themes.

We do the same. We complain of encroachments on our liberty, the debauching of our currency and national wealth, the weakening of the bonds that tie society together, and so on. And we do it many times, passing judgment with our "wise saws and modern instances", like Shakespeare's magistrate.

We're not alone. In a well-worth-reading article today, former Tory minister Neil Hamilton tells it like it is now with our rulers: democracy is dead (not that it was ever much alive). It's especially disturbing that senior politicians will say this now, not just the cranks among the public.

But why are we singing? Simone de Beauvoir said, "Every good book is a cry for help"; who do we hope will make speed to save us? And why does he have a sword and sceptre in his hands? Because to ask for help is to surrender power.

So let us combine against the oppressor. But who will lead us? And how will they mutate as they convert our assent into fresh authority? Is a libertarian party ultimately doomed by its oxymoronic essence?

George Orwell said, 'All historical changes finally boil down to the replacement of one ruling class by another. All talk about democracy, liberty, equality, fraternity, all revolutionary movements, all visions of Utopia, or "the classless society", or "the Kingdom of Heaven on earth", are humbug (not necessarily conscious humbug) covering the ambitions of some new class which is elbowing its way to power ...'

Like charity, liberty, wealth and happiness begin at home. Let us waste no more of our dreaming time on the puppets that wish to master us; in a Berkleian way, they are created and maintained only by our perception. Neither vote nor revolt; ignore. Trying to change society is like sending flowers to a soap opera wedding.

The revolution is personal. How much of your time and money could you save, reorganise, invest to make you and yours happier? "Il faut cultiver notre jardin."

And in our garden, the birds will sing.

Giant US slush fund?

Karl Denninger continues to reflect on a story that hasn't had much coverage - two Japanese have been caught in Italy, attempting to smuggle $134 BILLION in bearer bonds. KD thinks it's part of secret additional financing for the US.

This is not quite as ludicrously James Bond-ish as it seems. Bear in mind that some time ago, Brad Setser studied Treasury bond purchases by China and the UK and concluded that the latter country was acting as an additional conduit for the former's loans.

Good news for the Italians - their law says they'll take 40% of the contraband.

The housing market: qualifying my comments

Like many others, I'm in the habit of talking about "the housing market" in general terms. Surely this is no more helpful than talking about the average person's health, or the average temperature and climate of the Earth. In reality, there's a host of niches and scenarios - it's a sort of ecological system.

The London-based retiree looking for a bungalow in the South or South-West; the cereal packet family-of-four headed by a breadwinner; the pair of teachers deciding whether one can afford to go part-time; the buy-to-renter who sold out in time; the one who didn't; the rich guy dashing off a cheque for a Park Lane house to add to his international collection; the divorcee who bought out her ex-husband's share of the family home because she just can't let go; the car worker who's just lost his job; the Last Of England emigrant; the oldie looking for a sheltered housing apartment.

Houses sold by estate agent, by private treaty, by auction; houses sold, repossessed, swapped, abandoned, divided, combined, left as legacies, sold for care costs, seized by the law, occupied by squatters; flats, terraced houses, semis, detached dwellings. Brick and mortar, cruck, stone, straw bale, genuine and mock Tudor, eco.

Houses in central London, the London boroughs, the Home Counties, the provinces, Wales, Scotland and South-West; houses in thriving, decaying and recovering cities; in towns, villages, hamlets, lonely moors, islands; even a house on a pair of rocks on Newquay's beach.


How can one generalise meaningfully?

Why I think house prices must continue to fall

The West doesn't save enough and has borrowed too much, so it's going to be a moneylender's market. So, either:

• Interest rates go up, to make it worthwhile for lenders to continue financing us. This will cut into take-home pay and make it more difficult to service large mortgages. House prices will drop, and so, eventually, will rents.

However, high interest rates will be very painful. The other way is:

• The government will continue pumping cash into the system, one way or another. Our currency will depreciate further. Imports will become more expensive - and we import essentials like food and fuel. Since we have let our industries wither, we cannot quickly turn to providing for our own needs. So prices will soar and remain high for a long time. This will cut into take-home pay and make it more difficult to service large mortgages. House prices will drop, and so, eventually, will rents.

"Eventually" is happening now, as it happens. We were looking for a place to rent, found one on the Internet at £595/month, looked round it last week and the agent handed us a details sheet with the asking rent: £450.

Return of the spiv

Schiff's on a roll - read him. It's long, but worthwhile, epecially the predictive part at the end. An Eastern credit strike, a collapsing dollar, rapid inflation, price controls and the development of a black market.

Unless we bite the bullet and accept high interest rates and a further, bigger crash in house and share prices.

Charles Hugh Smith agrees.

Want to escape?

Try moving to Uruguay, for a "sustainable" lifestyle.

Or if you regard murder and suicide rates as indicators of general unhappiness, note the countries with low rates. (Also note how statistics is plagued with problems of accurate information, though.)

Euro and EU doomed?

Justice Litle thinks so.

Beg to differ on one point:

If the Brown government fails, Britain will be left rudderless in the midst of the worst fiscal storm in decades. In a worst-case scenario where bad events lead to worse decisions, opines Stephens, the domino chain could even lead to a British exit from the EU.

"Worst-case"? Au contraire, the sooner the better, and for the reasons he has given in his exploration of Europe's problems.

What slows us? Not just the dollar; demographics, too

F. William Engdahl argues that a key factor in future economic performance is demographics, and there are foreign countries with younger populations that will come into their own.

Off with his security pass!

Jim Fedako argues that the point of democracy is not to serve the people, but to allow ousted leaders to lose their jobs while keeping their heads.

Does liberty mean no more than this?

Life is a duck race

A few weeks ago, we watched a duck race in the Wye Valley. The ducks were emptied out of a big bag off the bridge at the same time, but at the finish a mile lower down, the winner was 20 minutes ahead of the second. Others had formed little groups and convoys, with stragglers and outliers.

Seems like a metaphor to me. The winner certainly didn't paddle any harder or smarter than the others. How much of a part does luck play in our lives?

Investment cataclysm?

The Mogambo Guru points out that the Standard & Poor's 500 Index stands at $940, but the earnings last week were $7.21, a price-earnings ratio of 130.

Historically, the p/e ratio of the S&P 500 has averaged less than 20 - whether you measure from 1881, 1900, 1945 or 1970.

If the earnings don't improve dramatically and soon, the implication is a super-crash. But even if earnings triple from last week's level, that would merely put us back to where we were in December 1999, when the S&P's p/e ratio stood at its highest-ever (up to then) level: 44.2. And as you know, the market went on to halve in value by 2003.

So the S&P earnings have to become three times better than they are now, just to match the pre-Millennium crash conditions.

The dominant feeling I have now is a diffuse sense of denial.

A winning move for New Labour?

What if New Labour's next General Election manifesto were to contain a pledge to hold a straightforward, binding referendum on British membership of the EU?

Call out the instigator

We are in one of those “generational revolutions” that Jefferson said were as important as anything else to the proper functioning of our democracy. We can no longer pretend that our collective behavior as a nation for the past 25 years has been worthy of us as a people.

I suggest you read this op-ed piece in the NYT (htp: Jesse). Revolution is in the air - here, too. That's why we need radical reform, instead.

He who pays the piper calls the tune

A couple of stories catch my eye:

China is requiring new PCs to come with factory-installed Internet filters (don't tell our government)...

... and may be buying American military secrets from the US Government (I believe I suggested this as a possible development quite some time ago, but I'm still looking for the reference.)

Recession - not even halfway there

Karl Denninger "does the math" and reckons that as Americans retrench, the economy will contract far more yet - at least 20% in total.

So anyone who has real money wants out: "The Chinese, Saudis and others with actual money that we are attempting to borrow to kick that can once again have figured out our scam and they are headed for the exits."

Coming soon: austerity, a devalued currency and high interest rates. And in the UK, it'll be worse.

A good time to save money, while you're still able to; and to bet against the crippled Anglo-American horses. No point piling up savings in our rotten fiat cash.

The Mogambo Guru continues to chirrup his commodities song.

Return of the Mighty Marmite Machine

They've put a new fuse in the Large Hadron Collider and found a few more shillings to run it on off-peak through the coming winter. Ex-D:Ream bandmember and nucular scientist Brian Cox has said "Anyone who thinks the LHC will destroy the world is a twat".

I've often suspected that those who employ the ad hominem strategy do so because they are on dodgy ground. I'm not a fan of logical proof by abuse, but it has its adherents.

Nevertheless, surely handsome, trendy Cox has heard of the possibility of a "Vacuum metastability event", explained thusly in Wikipedia:

"If our universe is in a very long-lived false vacuum, it is possible that the universe will tunnel into a lower energy state. If this happens, all structures will be destroyed instantaneously, without any forewarning."

How could this happen? A further link in the infallible Wiki universe considers the possibility of cosmic annihilation by particle accelerator:

One scenario is that, rather than quantum tunnelling, a particle accelerator, which produces very high energies in a very small area, could create sufficiently high energy density as to penetrate the barrier and stimulate the decay of the false vacuum to the lower energy vacuum. Hut and Rees,[3] however, have determined that because we have observed cosmic ray collisions at much higher energies than those produced in terrestrial particle accelerators, that these experiments will not, at least for the foreseeable future, pose a threat to our vacuum.

"...at least for the foreseeable future": a phrase to treasure, when set beside the earlier phrase, "...without any forewarning."

Not that I'd mind. After all, we'd know nothing about it. And it'd end the debate about global cooling / global warming / climate change - no guilt, either. And it'd make the Bible a nice bookend for both ends of the history of the universe, starting with "Let there be light" and ending "the day of the Lord will come as a thief in the night."

Throw that switch, Twatfinder General.

Selling off the family... gold?

A disturbing piece by Rob Kirby argues that the supposed reduction in the US trade deficit is partly accounted for by surreptitious exports of gold. Worrying on two fronts: first, that the real economic situation is worse than reported, and secondly, that when the gold market takes off, there won't be much left in the US. What will happen to the dollar?

Waiting for the turn...

I note that the Dow is creeping stealthily back up towards 9,000.

"What's the time, Mr Wolf?"

It's not going to be over by Christmas

Charles Hugh Smith thinks the current crisis will turn into a worse depression that the one of the Thirties. Citing Galbraith's study of the latter, he thinks inequality is a driving factor:

...the proximate cause was a vast income disparity which placed much of the prosperous era's profits in the hands of a small wealthy class, who then mal-invested the profits...

- in the "non-real" economy:

The financial Plutocracy, observing that actually producing goods is not very profitable unless you can fix prices [...] sinks its capital into the FIRE economy (finance, insurance and real estate), eschewing real-world investments as comparatively unprofitable.

Though rarely noted, this is a longstanding trait of capitalism stretching back to 1400-era Venice. When trade became less profitable than mainland farmimg, the Venetian Elite stopped funding trading and bought farms on the mainland. As a side effect, Venice ceased to be a military and trading power. But the Elite remained immensely wealthy.

Watch that Gini coefficient rise.