Is still shrouded in obscurity about its origins and contents.
COOL has met its match.
Or maybe we can't handle the truth.
COOL has met its match.
As I set transfixed watching the market freefall yesterday in North Dakota before a speech, I began to notice what the talking heads were not saying. Over three hours I did not hear the word "inflation" once.The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone. [More]
Commercial paper essentially can be compared as an alternative to lines of credit with a bank. Once a business becomes large enough, and maintains a high enough credit rating, then using commercial paper is always cheaper than using a bank line of credit. Nevertheless, many companies still maintain bank lines of credit to act as a "backup" to the commercial paper. In this situation, banks often charge fees for the amount of the line of the credit that does not have a balance. While these fees may seem like pure profit for banks, if the company ever actually needs to use the line of credit it would likely be in serious trouble and have difficulty repaying its liabilities.For example, banks may be shifting to honor their backup position for the failing commercial credit market. And it is indeed struggling.
Currently, more than 1,700 companies in the United States issue commercial paper. Financial companies comprise the largest group of commercial paper issuers, accounting for nearly 75 percent of the commercial paper outstanding at mid-year 1990. Financial-company paper is issued by firms in commercial, savings and mortgage banking; sales, personal and mortgage financing; factoring; finance leasing and other business lending; insurance underwriting; and other investment activities. The remaining commercial paper outstanding at mid-year 1990 -- over 25 percent -- was issued by nonfinancial firms such as manufacturers, public utilities, industrial concerns and service industries. [More]
When the credit crisis started to unfold last summer, the key area of weakness within commercial paper was mortgage-related asset backed instruments tied to the already declining U.S housing market. But now, the sag in issuance by financial firms is a sign that the whole commercial paper part is succumbing to broad lending markets stress and endangers the the whole economy, analysts said.The freezing of commercial credit stops business in its tracks and could trigger order cancellations and layoffs. In fact, for businesses already struggling a month ago, loss of commercial paper affords a gold-plated opportunity to downsize and shift the blame elsewhere.
"These declines in some ways carry more weight than those of a year ago, when the market was purging issuers with mortgage-related exposures," wrote Crescenzi. "This time the purge is broad and is impacting issuers with far more predictable cash flows--regular run-of-the-mill companies in need of working capital," he wrote.
As the global credit crisis deepens, banks' distrust of lending to each other has worsened in interbank markets, with many hoarding cash for fear that some short-term loans might not get repaid. A similar dynamic is roiling the commercial paper market, analysts say.
Money market funds have diverted hefty amounts out of commercial paper and other non-government instruments into the ultra-safe haven of Treasury bills, after a money market mutual fund broke the buck, or fell below $1 per share value last week, triggering investor fears about the safety of short-term paper from banks, insurers and companies.
"The declines reflect the seizing up of the credit market and withdrawals of monies from money market funds, which held $700 billion of commercial paper at the end of the second quarter," wrote Tony Crescenzi, chief bond market strategist, Miller, Tabak & Co. in New York in an email note. [More]
“The credit at risk extends well beyond mortgages. It includes automobile loans, college loans, credit cards, small-business loans. Businesses need credit to grow, and without that they will stagnate, which could cause layoffs or business closures. Thus, while global capital markets and short-term funding seems a world away from Arizona, no one is insulated from the impact. The tightening of credit in the wider market is just the beginning,” said Tanya Wheeless, CEO if the Arizona Bankers Association. [More]
For the last 5 months there has been an auction sign on an adjoiningI know I'm checking with my local banker today. Anybody else seeing credit issues?
farm for which I have had my eye on for nearly 50 years. Tried to have
my financial house in order and was working with several lenders over
the last months on who was most interested in working with us. Had
several offers with attractive interest rates and the cash flow was
there even based on $4.50 corn and $11.00 beans. Just learned yesterday
that the interest rates are up over 2% in 2 weeks and we can not lock in
just yet. This does change everything for us. Still glad however that
God is still in control. We have been praying that God would guide this
decision and that He did have our permission to stop us if this is not
for us. A very secure place to rest.
The sums involved are staggering. As a comment that Greg Mankiw, the former White House economic adviser, posted on his blog asked, "Has more money ever been given with fewer restrictions on how it is used? Ever?"
In 1932, at the height of the Great Depression, the government created the Reconstruction Finance Corp. to make loans to banks, railroads and others. President Hoover asked for $2 billion--equivalent in today's money to $30 billion--and spent just under that amount in the RFC's first year. The country then was in the midst of an economic catastrophe. Economic output had dropped 45 percent. Production of steel and autos were each down by three-quarters. Unemployment was 24 percent, and so on.
The allocation sought by Paulson is 23 times bigger. And it is in addition to the tens of billions pledged to back loans to Bear Stearns, Fannie, Freddie and A.I.G.
America's economy does not face an emergency--only its financial system does. This is a distinction lost on the bankers in Washington, but it is one worth remembering. On Main Street, unemployment is 6.1 percent. Home prices are down close to 20 percent and presumably headed lower. These numbers are not pretty, but they do not add up to an economic Pearl Harbor or even close.
Of course, potentially several million Americans face home foreclosure. That is a crisis, but it is a slow-developing one, for which the normal legislative process--as distinct from a shotgun corralling of Congress--will suffice. And the Paulson plan does not help homeowners. [More]
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:and the final word for me:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, Americas dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come. [More]
Just when I was starting to feel disillusioned in my profession, the Stiglitz/DeLong/Edlin edited Economists' Voice lashes out against the Paulson bail-out. Just let me add: If we've learned anything from the Iraq War, it's that it's a good idea to calmly review the facts before taking drastic action. [More]
Industrial manufacturer Honeywell said Tuesday it has developed a new nitrogen-based fertilizer that is difficult to ignite — a discovery that could reduce criminals' ability to make explosives used in major terrorist attacks like the Oklahoma City bombing.
Honeywell International Inc. said its patented fertilizer combines ammonium sulfate with ammonium nitrate, providing the nitrogen and sulfur needed for plant nutrition but making it largely useless as a fuel for explosives. The company said that when mixed with substances such as fuel oil — a volatile combination often used to make bombs — the new fertilizer did not detonate.
"The unique composition of this new fertilizer makes it extremely difficult to turn it into a weapon," said Qamar Bhatia, vice president and general manager of Honeywell Resins & Chemicals, in a statement. "Ammonium nitrate has long been an excellent fertilizer, but this technology makes it safer." [More]
I'm sure you've heard about the troubles newspapers are facing these days: ad revenues in free-fall, circulations plummeting, classifieds going to craigslist and the cost of newsprint going up because — and this is crazy — apparently more people are reading newspapers in India and China! Go figure.
Reporters and editors are dropping like flies. Just look what's happening at The Los Angeles Times. They fired so many reporters there, some of them finally got pissed off enough to sue their corporate owners for running the paper into the ground.
Connecticut's newspapers are in a world of hurt too, and could really use a lifeboat. The New Haven Register, the once-proud daily with a 200-year history, is poised to go belly up. Its delisted stock was trading at half a penny this week. What is that, a shilling? The Hartford Courant, the nation's oldest continuously published daily, lost a quarter of its newsroom staff in a single devastating round of buyouts. Even the beloved New London Day had to fire a bunch of reporters and editors to make ends meet. It's really that gloomy. [More]
All over in the blink of an eye
This is a reconstruction of a crash involving a stationary Ford Falcon XT sedan being struck in the driver's door by another vehicle travelling at 50 km/h.
One millisecond equals 1/1000th of a second.
0 milliseconds - An external object touches the driver's door.
1 ms - The car's door pressure sensor detects a pressure wave.
2 ms - An acceleration sensor in the C-pillar behind the rear door also detects a crash event.
2.5 ms - A sensor in the car's centre detects crash vibrations.
5 ms - Car's crash computer checks for insignificant crash events, such as a shopping trolley impact or incidental contact. It is still working out the severity of the crash. Door intrusion structure begins to absorb energy.
6.5 ms - Door pressure sensor registers peak pressures.
7 ms - Crash computer confirms a serious crash and calculates its actions.
8 ms - Computer sends a "fire" signal to side airbag. Meanwhile, B-pillar begins to crumple inwards and energy begins to transfer into cross-car load path beneath the occupant.
8.5 ms - Side airbag system fires.
15 ms - Roof begins to absorb part of the impact. Airbag bursts through seat foam and begins to fill.
17 ms - Cross-car load path and structure under rear seat reach maximum load.
Airbag covers occupant's chest and begins to push the shoulder away from impact zone.
20 ms - Door and B-pillar begin to push on front seat. Airbag begins to push occupant's chest away from the impact.
27 ms - Impact velocity has halved from 50 km/h to 23.5 km/h. A "pusher block" in the seat moves occupant's pelvis away from impact zone. Airbag starts controlled deflation.
30 ms - The Falcon has absorbed all crash energy. Airbag remains in place. For a brief moment, occupant experiences maximum force equal to 12 times the force of gravity.
45 ms - Occupant and airbag move together with deforming side structure.
50 ms - Crash computer unlocks car's doors. Passenger safety cell begins to rebound, pushing doors away from occupant.
70 ms - Airbag continues to deflate. Occupant moves back towards middle of car.
Engineers classify crash as "complete".
150-300 ms - Occupant becomes aware of collision. [More]
Time will tell, but likely medium-term implications include higher government interest payments, worse deficits and higher taxes. This certainly reduces the probability of making the Bush tax cuts permanent in a couple of years, no matter who is in the White House. [More of the best summary of the situation I have read to date]
Sovereign wealth funds may increase investment in commercial properties to a net $725 billion by 2015 as they diversify their holdings from stocks and bonds, according to CB Richard Ellis Group Inc.
The funds will probably raise the proportion of money they invest in real estate to 7 percent from 4 percent in the next seven years, the world's largest commercial-property broker said in a report published today. Abu Dhabi, Norway, Saudi Arabia, Singapore and China have the largest funds, CB Richard Ellis said. [More]
Commodities have been slammed in the last two months due to the dollar rally. But we are now nearing a time of hyperinflation when the Feds paper over any and all problems with reckless abandon. As the market comes to realize this, commodities and other inflationary hedges will begin their bull market anew. [More]
I suppose politicians are suspicious of silence because it allows people to think for themselves. It has power. And nowhere is it more powerful than in a church. That is why religions talk of "inner silence", and "a silent mind freed from the onslaught of thoughts". Not an empty mind, note.While I don't mind being the last of a species sliding into extinction, after a while applause may lose its power to acclaim. Consider the infamous SOTU (State of the Union) address, where applause-scoring forms the modern substitute for actual analysis by commentators and the cadence of great oratory has been sacrificed for political preening.
Besides, silence can fill a room in a way that applause never can. It can also provide us with a sense of communion with those around us and a feeling of harmony with ourselves. Perhaps it is reflection we are afraid of, then. Perhaps this is why we surround ourselves with sound - in our kitchens, in our cars, even as we are walking from the station with our earphones attaching us to our iPods.
Theatres always ask audiences to switch off mobile phones before a performance begins. I don't see why concert halls can't do the same, gently reminding people that it might be considerate to others not to applaud until the work is over. The same could apply to churches. But perhaps it's just me. I'd also ban that excruciating moment in a service where you are supposed to turn to your neighbour and shake hands. [More]
Will it work: The jury is still out, although experts are cautiously optimistic the plan will help the housing crisis.Much of the problem for the housing industry was overpricing to the point that almost any mortgage was questionable by former financial standards. Most people could not afford most homes. Instead the expectation of rising prices meant today's dubious lending would be justified a few months from now.
The plan will help banks shore up their balance sheets by removing hard-to-value assets. This would address the seemingly endless rounds of writedowns and capital raising that have been rocking the financial sector.
Without these bad loans weighing on their books, banks may be more willing to lend. Or at least that's the goal.
The problem is that the bailout will not automatically make banks profitable, nor will it stop the slide in home values that is wreaking havoc on the economy.
Will it help homeowners: It's unclear at this point. If the government buys an entire securitized loan, it could opt to help struggling homeowners by modifying the terms. This could include reducing a loan's interest rate or principal balance.
But it could prove difficult to snap up all the securities sold on a mortgage, experts said. And as long as investors still hold a piece, they could block any changes to the loan.
If the plan doesn't stem the tide of foreclosures, home prices will not stabilize and the economy will not recover, experts said. [More]
Any analysis of the plan was hamstrung by a lack of details. Economists warned that the spending splurge could put enormous strain on an already weak economy by raising interest rates and creating inflationary pressures. Many are also concerned that the plan does little to address the underlying problems in the housing market, which continues to sink, putting heavy pressure on American consumers. [More]
The person who will be on that cover is someone we've all heard of, Ben Bernanke. As Andrews points out, Bernanke is selling treasuries to buy the assets that Karabell thinks are undervalued. Meanwhile, the market is falling all over itself to go in the opposite direction.As you can tell, our best economic minds are all over the board on this one, but most fall into the camp that doing nothing could have produced this century's Great Depression. I'm not so sure we have truly avoided it, nor am I convinced our hard-pressed national credit rating will support more efforts like this.
The best case scenario is that the U.S. government hedge fund makes a big profit for the taxpayers over the next few years. The worst case scenario is that house prices go into free fall and the taxpayers take a loss. But in that case, you could argue that the Fed's actions were at least countercyclical.
The accounting issue is a tough one. When the market prices are obviously right, then firms that refuse to mark to market so they can keep adding to their risk are a menace. The S&L crisis is the notorious example.
When market prices are obviously wrong, then mark-to-market is a bad thing. Karabell makes that point eloquently.
I think that market prices are more likely to be right than wrong, and it is particularly difficult to identify when they are obviously wrong. Even now, when I think the odds favor the Bernanke hedge fund making a profit, that's just my opinion. Others think that he is going to take a bath, perhaps an awful one. Ken Rogoff, in the piece I linked to yesterday, seems to be in that camp. So, I still think that, in an imperfect world, mark-to-market is the best choice. [More]
While few records remain pertaining to the daily operations of the early printing workshops of 1450-1500, it is possible to reconstruct a general picture. Early printing was a complex process involving many different kinds of materials and skills. In order to print written material on paper, a printer needed to create or obtain type, compose the text by arranging the type into lines of words, placing the arranged type onto a wooden press, and using this intricate mechanism to apply pressure on the inked type to impress it into dampened paper. Print shops housed one or many presses, depending on the size of the operation, with each press requiring two pressmen for optimal production. The variety of tasks called for many workers, including typefounders, typesetters or compositors, ink makers, and printers. It is estimated that the work day consisted of 12-14 hours of grueling physical labor under poor conditions in comparison to current standards. Estimations about printing output vary, but it is thought that 300 sheets or 600 folio pages could be printed in a shop each day. In addition to books, print shops printed ephemera, including broadsides and indulgences. [More]As I drool over a Kindle to take over my reading mechanics, it is hard not to wonder if the ol' printing press is slip-sliding away.
You might have wondered if it's possible to drive between North and South America - for surely there must be a road between these two continents! Well, as it turns out, there is absolutely NO ROAD connecting them, and all travel advisories clearly says "Don't Go", even if you feel somewhat suicidal. I am talking about the wild and wildly dangerous Darien Gap. [More]Send me a postcard.
So what's the real cost to taxpayers for all these interventions? No one can say for sure, and probably won't be able to for some time. The Savings & Loan crisis of the early 1990s cost taxpayers a net of $124 billion in 1999 dollars, according to the FDIC - more than initially estimated but below projections made during the height of the crisis.
But one thing is certain: The price tags on today's bailouts bear "no direct translation to the taxpayer cost," said Lyle Gramley, a former Fed governor now with the Stanford Group, a Washington policy research firm.
Indeed, he said, "None of us knows yet if there'll be any cost to the taxpayer at all." [More]
The proposal to create a massive facility to buy mortgage-backed securities could cost as much as a half-trillion dollars and would involve the purchase of both private-label and government-guaranteed mortgages, according to an administration official. [More]
There were growing fears today that the financial-industry bailout being worked out by US authorities could take a heavy toll on the American economy, with cost estimates as high as $2 trillion (£1.09 trillion).
Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke hope to unveil their proposals on Monday, with the most likely option being to establish an $800bn fund to purchase so-called failed assets, and a separate $400bn pool at the Federal Deposit Insurance Corp to insure investors in money-market funds.
They say they will need legislative support for their scheme, and key US politicians have pledged to pass any necessary measures within days.
But questions are being raised over whether even the US government's pockets are deep enough. Estimates of the eventual price the US taxpayer will have to pay to end the credit crisis vary from $500bn to $2 trillion. [More]
So much for the American Dream and the politicians who not only promised a chicken in every pot but a Viking Stove to cook it on and a granite counter top on which to place the warming tray. Perhaps this is the catharsis we needed to understand that not everyone should own a house or other bought on credit goodies beyond our means. It may be the only way out of this nightmare where we end up on the ground like Kong with no one capable of administering CPR.
The pursuit of happiness has cost us dearly. [More]
This discovery has important implications. (A more recent paper by the Cohen lab extends the theory.) For starters, it locates the neural source for many of our financial errors. When we opt for a 2/28 mortgage, we are acting like experimental subjects choosing the wrong gift certificate. Because the emotional parts of our brain reliably undervalue the future - life is short and they want pleasure now - we end up delaying saving until tomorrow (and tomorrow and tomorrow.) George Loewenstein, a neuroeconomist at Carnegie Mellon University and a collaborator on the Cohen paper, thinks that understanding how we make decisions will help economists develop better public policies: "Our emotions are like programs that evolved to solve important and recurring problems in our distant past," he says. "They are not always well suited to the decisions we make in modern life. It's important to know how our emotions lead us astray so that we can design incentives and programs to help compensate for our irrational biases." [More]Of course, we have been ignoring our rational brain (or taking advantage of others' emotional brains) for millenia, but watching it unfold on an fMRI scan, I think somehow makes it more real than before. The other complicating factor is the wide array of pleasures on sale right now. A consumer driven economy after all competes to engage your attention and dollar immediately - not at some appropriate future moment.
One study by Gueguen et al. (2004) found that higher sound levels lead to people drinking more. In a new study published in Alcoholism: Clinical & Experimental Research, Gueguen et al. (2008) visited a bar in the west of France to confirm their previous finding in a naturalistic setting. Here, they observed customers' drinking habits across three Saturday nights, in two different bars in the city.Well, duh! It's not like you could actually talk instead.
The level of the music was randomly manipulated to create the conditions of a true experiment. It was either at its usual volume of 72dB or turned up to 88dB. For comparison: 72db is like the sound of traffic on a busy street while 88db is like standing next to a lawnmower.
Sure enough when the music went up the beers went down, faster. On average bar-goers took 14.5 minutes to finish a 250ml (8 oz) glass of draught beer when the music was at its normal level. But this came down to just 11.5 minutes when the music was turned up. As a result, on average, during their time in the bar each participant ordered one more drink in the loud music condition than in the normal music condition. [More]
Credit default swaps are insurance-like contracts that promise to cover losses on certain securities in the event of a default. They typically apply to municipal bonds, corporate debt and mortgage securities and are sold by banks, hedge funds and others. The buyer of the credit default insurance pays premiums over a period of time in return for peace of mind, knowing that losses will be covered if a default happens. It's supposed to work similarly to someone taking out home insurance to protect against losses from fire and theft.
Except that it doesn't. Banks and insurance companies are regulated; the credit swaps market is not. As a result, contracts can be traded — or swapped — from investor to investor without anyone overseeing the trades to ensure the buyer has the resources to cover the losses if the security defaults. The instruments can be bought and sold from both ends — the insured and the insurer. [More]
If A.I.G. had collapsed — and been unable to pay all of its insurance claims — institutional investors around the world would have been instantly forced to reappraise the value of those securities, and that in turn would have reduced their own capital and the value of their own debt. Small investors, including anyone who owned money market funds with A.I.G. securities, could have been hurt, too. And some insurance policy holders were worried, even though they have some protections.
“It would have been a chain reaction,” said Uwe Reinhardt, a professor of economics at Princeton University. “The spillover effects could have been incredible.” [More]
"Ben, you are playing a very unique role in world economic history," Hale recalled telling Bernanke, an expert in the Great Depression. "You are the first central bank governor of the United States to preside over a recession with no decline in commodity prices."
Bernanke could hypothetically limit inflation in commodities by raising interest rates, a policy that would restrict the flow of money but potentially lead to an avalanche of bank failures. At a financial conference in Florida on Tuesday, Hale, a Chicago-based economist for investment managers, hedge funds and multinational companies, paraphrased the Fed chairman's response.
"We have lost control," said Hale, quoting Bernanke. "We cannot stabilize the dollar. We cannot control commodity prices."
If efforts to stop a recession sent commodities to record levels through July, then the realization that a recession could be imminent has sunk oil prices by almost 40 percent during the past two months. For all the debate about foreign demand and financial speculators, one overlooked aspect of commodity prices is the health of the American economy. [More]
Indeed, a year ago, a six-month certificate of deposit earned, on average, 3.53%, according to Bankrate.com (RATE). Today, that's down to 2.03%. A one-year CD that earned 3.75% at this point in 2007 was offered for as little as 1.92% in April, before inching up to its present 2.38%. It's hardly a secret that banks are only able to pay out such pittances thanks to depositors' knee-jerk desire for security: "Hey, I might be earning crumbs on my cash, but at least I'm not losing money."Despite the pounding savers have been taking it is being erroneously translated, I believe, into a moral tale centered on the virtue of money as the ultimate asset. Money, especially fiat money such as ours, is an odd choice for such adoration. It's primary quality is liquidity, the ability to turn it into assets that actually are something well, real. It is also easily evaluated - the appraisal value is right on the bill, of course.
Sure you are. Wholesale inflation has soared 9.8% in the past 12 months, the highest clip since 1981. The more widely cited consumer price index jumped to 5.6%. In other words, while your saved buck was adding 2 cents or so on one end (and even less after taxes), three times as much was getting singed off the other end of that dollar bill. "Inflation is just deadly to savings," says David Gitlitz, chief economist at TrendMacrolytics, an investment adviser. Gitlitz observes that, taking into account the hit from inflation, rates haven't been this negative since the dreary 1970s. (That, in turn, gave way to an early '80s that saw the worst inflation in U.S. history since the Civil War.) "It steals your purchasing power and sets less and less of an incentive to keep money in the bank." [More]
The Old Order Amish Bassett studied in southern Ontario don’t talk much about exercise, he says.
“The Amish don’t exercise like we do or talk about exercise,” Bassett noted. “They talk about work. It’s hard physical labor. It’s done for the purpose of putting food on the table or raising a barn. There’s a purpose to it beyond burning calories.”
But burn calories they surely do, as his study in the January edition of Medicine and Science in Sports and Exercise demonstrates.
The 98 Amish adults Bassett surveyed wore pedometers for a week. The men averaged 18,000 steps a day. The women took an average of 14,000 steps.
The men spent about 10 hours a week doing heavy work like plowing, shoeing horses, tossing hay bales, and digging. The women spent about 3.5 hours a week at heavy chores. Men spent 55 hours a week in moderate activity; women reported 45 hours a week of moderate chores like gardening and doing laundry.
The obesity rate among the participants was 4 percent, as determined by body mass index, or BMI. The current obesity rate among the adult American population is a whopping 31 percent. [More]
Managers at Potash Corp. of Saskatchewan restarted operations at the fertilizer giant's Allan mine on Monday, the largest of three potash mines where workers have been on strike since Aug. 7, a spokesman said Tuesday.As I posted earlier this summer, until potash production capacity rises demand will be pushing prices until usage is curtailed. This seems to be happening in the minds of stock analysts as fertilizer stocks have dropped back sharply from recent stratospheric highs.
The company has not determined how much potash it will be able to produce from two shifts at the mine, which normally runs on four shifts, spokesman Bill Johnson said.
The Allan mine produced 1.744 million tonnes of potash in 2007, or 19 per cent of the company's total output.
It is still too soon to gauge whether the strike by about 500 mine workers will affect Potash Corp.'s ability to meet its sales commitments, Johnson said. [More]
In early August, close to 500 United Steelworkers union members walked off the job at three Potash Corp. mines after contract negotiations broke down. The workers had been without a contract since April. As of Monday, there weren't any talks scheduled between the union and the company. Potash Corp. has plans to increase capacity at their mines by 76% by 2012, and is still expecting to go forwardThe rumor in my corner of the Corn Belt is probable rationing of around 80% on at the dealer level. Of course those are the same hysterical voices who last year said seed corn could hit $300/bag.
As of now, Potash has managed to start up one of the mines, at least in a limited fashion. While the strike has affected deliveries of the mineral to Potash Corp.'s industrial customers, farming season demand has yet to hit - look for headlines to scream of a potash shortage, and spot prices to rise, if the strike continues on into October. (That all could be good news for Mosaic, of course, which is the key competitor in terms of potash production.) [More] with those expansion plans. Of course, increasing capacity without actual miners to turn that into capacity utilization ...
But let's say that the Treasury did not support the debt of the mortgage agencies. The Chinese bought over $300 billion of that stuff and they were told that it is essentially riskless. The flow of capital from them and from other central banks, sovereign wealth funds, and plain old ordinary investors would shut down very quickly. The dollar would fall say 30-40 percent in a week, there would be payments system gridlock, margin calls at the clearinghouses would go unmet, and only a trading shutdown would stop the Dow from shedding half its value. Most of the U.S. banking system would be insolvent. Emergency Fed/Treasury action would recapitalize the FDIC but we would lose an independent central bank and setting the money supply would be a crapshoot. The rate of unemployment would climb into double digits and stay there. Many Americans would not have access to their savings. The future supply of foreign investment would be noticeably lower. The Federal government would lose its AAA rating and we would pay much more in borrowing costs. The deficit would skyrocket. [More]
In its summer budget update, the nonpartisan budget office said the federal deficit would likely double this year compared with last year, and remain at about 3% of gross domestic product for the next two years.What these two events suggest to me is it will be hard to continue to cut (or retain current tax cuts) taxes unless the economy miraculously roars to life. It also means our additional borrowing will strain available global savings and our interest costs will rise to meed our borrowing needs.
For 2008 fiscal year (which ends at the end of the month), the CBO forecast a $407 billion deficit, or about 2.9% of GDP. The deficit should rise to $438 billion in 2009 and $431 billion in 2010.
The medium-term projections now assume continued spending on the wars in Iraq and Afghanistan, and also assume that the 2001 and 2003 tax cuts will expire on schedule.
Unlike the February update, which showed the budget roughly in balance through 2018 under favorable assumptions, the September projection now sees deficits totaling $2.3 trillion over the next 10 years. Those projections assume that the 2001 and 2003 tax cuts expire and that the alternative minimum tax is not changed.
If the tax cuts are extended as the White House and the McCain-Palin ticket want, the deficits over the next 10 years would be $4.2 trillion higher than now projected, CBO said. [More]
But the tale of the disappearing barn, a building whose purpose shifted, then faded away, tells a bigger story too, of how farming itself, a staple in this state then and now, has changed markedly since those writers drove through.
What had in the 1930s been an ordinary farm here — 80 or 160 acres and a few cows and sheep and chickens — is today far bigger and more specialized to pay for air-conditioned, G.P.S.-equipped combines and tractors, so much fuel and the now-skyrocketing price of farmland.
Competition for land — to rent or buy — has grown cutthroat and overwhelming, a matter of networking and schmoozing (at church, at the local coffee shop, while selling seed) worthy of the corporate boardroom. (Some here tell of people who call the widows of farmers who have died days or hours earlier, hoping to secure land.)
All of that has left some of Iowa’s youngest, newest farmers doubtful that one could make a start in farming anymore without roots and connections and land dating back, say, to the W.P.A. era. [More]
Everyone hates their Internet service provider. And with good cause: In the age of ubiquitous Internet access, Web service in America is still often frustratingly slow. Tired of being the villain, telecom companies have assigned blame for this problem to a new bad guy. He's called the "bandwidth hog," and it's his fault that streaming video on your computer looks more like a slide show than a movie. The major ISPs all tell a similar story: A mere 5 percent of their customers are using around 50 percent of the bandwidth—sometimes more during peak hours. While these "power users" are sharing three-gig movies and playing online games, poor granny is twiddling her thumbs waiting for Ancestry.com to load.It is important to keep in mind it only takes a relative few bandwidth hogs to slow the system for all users, whether your system is a national behemoth or a very local ISP. I've noticed I can get more stuff done, for example early (5-7 AM) compared to after 4. Not only is this a mildly useful workaround (especially when you're my age and can't sleep in even if you want), it is a straightforward market response to signals.
The ISPs are certainly correct that there's a problem: The current network in the United States struggles to accommodate everyone, and the barbarians at the gate—voice-over-IP telephony, live video streams, high-def movies—threaten to drown the grid. (This Deloitte report has a good treatment of that eventuality.) It's less clear that the telecom companies, fixated as they are on the bandwidth hogs, are doing a good job of managing the problem and planning for the future. The ISPs have put forward two big ideas, in recent months, about how to fix our bandwidth crisis. We can arrange these plans into two categories: horrible now and horrible later. [This is a superb article worth your time just to find out what the two proposed solutions could look like]
A week after Google released a Web browser of its own called Chrome, it's clear that despite the frailty of Chrome's beta code, there's a seismic shift occurring in the computer industry.
The desktop is dying. Long live the browser.
It's not that no one saw this coming. Microsoft (NSDQ: MSFT) anticipated the threat the browser posed to its desktop monopoly when it killed Netscape. But it was too late. Netscape metastasized and Mozilla emerged with Firefox, stronger than its predecessor thanks to the open source movement and its corporate supporters like Google, IBM, Sun Microsystems, and Yahoo.
At least as far back as 2005, there have been credible attempts to de-emphasize the desktop with Web-based media-sharing and application services like TransMedia's Glide. But such efforts have yet to reach critical mass.
Chrome marks the coming of age of cloud computing, or software as a service. [More]
Critics of the Large Hadron Collider - a £4.4 billion machine due to be switched on in ten days time - have lodged a lawsuit at the European Court for Human Rights against the 20 countries, including the UK, that fund the project.Science is boldly going where many don't want to go. Luckily, it only takes a few to drag humanity forward.
The device is designed to replicate conditions that existed just a fraction of a second after the Big Bang, and its creators hope it will unlock the secrets of how the universe began.
However, opponents fear the machine, which will smash pieces of atoms together at high speed and generate temperatures of more than a trillion degrees centigrade, may create a mini-black hole that could tear the earth apart.
Scientists involved in the project have dismissed the fears as "absurd" and insist that extensive safety assessments on the 17 mile long particle accelerator have demonstrated that it is safe. [More]