A Big Fracking Deal...  

I'm officially naming the explosion (heh) in natural gas production as the The Big Thing for 2011. Although I was impressed at the time I first heard of it, it continues to create huge side-effects that wil rock our world.

• NG exploration has helped the steel and construction industries.

For example, estimates of Pennsylvania job creation due to increased shale gas production since 2009 range from 44,000 to 72,000. In Bradford County, Pa., the 2009 unemployment rate of 10 percent has been halved because of Marcellus Shale gas development. New York’s economically depressed Southern Tier is also benefiting from gas field development in nearby Pennsylvania. Case in point: RB Robinson Contracting, Inc., a family construction business in Candor, N.Y., had eight full-time employees in 2009. Today, it provides full- and part-time work for 120 people.

Ohio’s steel industry has also felt the economic impact of the revival of shale production. More than 400 workers in Youngstown are constructing a new $650 million steel mill for Vallourec & Mannesmann Holdings, Inc. It will annually produce a half million tons of seamless steel well tubing used in drilling and “fracking” natural gas wells. U.S. Steel is spending $95 million to expand and upgrade its tubular steel mill in Lorain, Ohio, and Timkin is spending $50 million on a similar project at its Canton mill." [More]

• NG is replacing coal and oil (especially in the East)for electricity.

Natural gas will replace coal as the leading fuel for generating electricity in the U.S. by 2025, when it will also become the world's No. 2 overall fuel source thanks to its abundance and a drive for cleaner-burning energy, according to the latest long-term outlook from Exxon Mobil Corp. [More]

Here in the US, NG will become the #1 electricity fuel even sooner: 2019. And while it is not a panacea for carbon emissions, it does have big advantages in transportation, distribution, and its own environmental plusses.

• NG may be pulling the plug on wind farms even with their subsidies. I'm not counting this as a plus, just acknowledging I was wrong about the effect of more NG.  I thought peaker plants would help to stabilize the grid with lots of fickle wind turbines and their fluctuating output, but it seems it's easier to just build the NG generators.

General Electric saw a drop in demand for its wind power turbines to around half of its 2009 sales levels as power companies turned to natural gas for cheaper alternative energy forms, the company said on a conference call. GE is the top supplier of wind turbines for some of the nation’s largest wind power farms — huge swathes of land dotted by giant windmills that use the wind to generate anywhere from 1 to 3 megawatts of power per windmill. Each turbine and wind farm typically carries enormous upfront capital costs that can take several years before the power company can recoup its costs. [More]

• NG could spawn more basic chemical production, as it is an excellent feedstock for all kinds of basic chemical needs.

Officials in Appalachian states are hoping the natural-gas boom will attract more than just controversy to their economically struggling region. Pennsylvania, Ohio and West Virginia are offering tax breaks and incentives to "ethane crackers," or the multi-billion dollar plants that start the chain of making ethylene, a basic feedstock for chemical plants, reports Gabriel Nelson of Energy and Environment News.

No ethane cracker has been built in the U.S. since 2001 because natural-gas prices were too high, and most production was sent overseas. Since new deposits, such as those in the Marcellus Shale, have been tapped, crackers are now cheaper in the U.S. than anywhere except the Middle East. The U.S. ethane supply has grown by 25 percent over 10 years, and because it's harder to transport than methane, cracking plants must be located close to drilling sites. Nelson reports if ethane supplies stay at current levels, petrochemical companies will spend over $16 billion on pipelines and crackers. [ More]

I still am not sure how this will play our for transportation fuel, but this close the the East Coast, where oil is still used for home heating and electricity, replacing both with NG could dampen demand for oil enough to keep gasoline prices lower than might be expected. This is not good news for ethanol, and would seem to cap upside potential to the mandate.

I'm OK with that possibility, especially since we can't seem to match our predictions for corn production, and it is rapidly becoming clear cellulosic ethanol is a joke.

Like I predicted. [Apologies for shameless, gratuitous self-congratulation, but getting something right happens soooo rarely...]

Could not resist...  

Just one quick post.

On the subject of The Great Land Bubble:

Is China about to implode? Paul Krugman is worth a read on the subject, though in the end he doesn't know any better than anyone else. For what it's worth, the one encouraging thing I've consistently read about China is that their property bubble is largely driven by cash purchases, not debt. And non-debt bubbles, like the dotcom bubble, are inherently less destructive when they burst than debt-driven bubbles. [More]

I agree whole-heartedly. The other difference with a farmland bubble is the low velocity. Most of us never want to actually sell the land, so after a while even a way off-base price is little more than an unpleasant memory. I suppose I have paid too much for land, but my heirs won't care, just like I don't care what my forebears paid for the land handed down to me.

Then again how often have we said, "This time is different?" But even if we are way wrong, the default rate on land mortgages in 1987 (the bottom) was about 7%, or viewed from the other direction, 93% gritted our teeth and scrounged up the payments somehow.

Better and better...  

After Herculean effort, my ISP guy (a young farmer/engineer neighbor) has fired up a REAL Internet connection.  I use picpitstop.com to measure speed and I've been hitting 13+ Meg (down) and nearly 1M up.

However, something screwy is going on with my Mac and Airport router.  I have to restart several times, swap cords, reconfigure, sacrifice a chicken, and I still don't know what happens. I have to get that squared away and write the Christmas letter today.


I'll try to post some stuff before I drop off for no good reason.


(I'll bet I need a new 27" iMac, don't you?)

#%^&**$@!...  

My e-mail account was hacked a few hours ago (password stolen) and a stream of messages sent from my account. To all affected, sorry. I think I have stopped the flood.

To be fair, Macs are very virus-proof, but passwords are my own responsibility.

Junkbox, Episode XIXMAS...  

AT&T is frustrating my ISP guy by missing appointments for a new high-bandwidth "pipe" like...well, a cable guy.  Meanwhile, I can't get iCloud to clear up (heh).

• The farm boom isn't doing much for the rest of our counties
• Farmers didn't just suffer through the Great Depression - one economist thinks they caused it. (I respectfully disagree with his analysis)
• The looming Shrubbery Crisis
• Finance isn't about allocating capital anymore.
• Another biotech promise seems in doubt
• Nice guys do actually finish last 

 Still not too late for shopping, folks.

Peak ethanol...  

Perhaps.

Drivers of the approximately 16,500 highway-worthy electric vehicles in the U.S. can choose from 4,448 public charging stations should they want to plug in someplace other than home or work, according to U.S. Energy Department data.
That's one per 3.7 electric cars, such as Nissan's Leaf or Tesla's Roadster. That compares with 2,468 places to fill up the 7.6 million vehicles that can run on E85, a fuel that is 85% ethanol. E85-capable vehicles, also known as flex-fuel vehicles, can run on either E85 or traditional gasoline.
The Obama administration is pushing for still more charging stations, with $230 million worth of support from the Energy Department and private investment:
Ecotality received funds under the federal program to install 14,000 chargers in 18 metropolitan areas in six states and the District of Columbia.
"Electricity is the flavor of the month, just as others have had their time in the sun, electricity is now there," said Brett Smith, co-director of manufacturing, engineering and technology at the Center for Automotive Research in Ann Arbor, Michigan. "Is this a long-term technology or is it just that flavor of the month?"
Smith cited E85 and hydrogen fuel-cell cars as examples of technologies that have been favored by the government before the Obama administration chose to promote electric vehicles through policy and spending. [More]

And of course, ethanol is not wildly popular with the Republican Tea party base outside farm states.

But this year is an exception because the party, under increasing influence from the Tea Party, has pivoted on the subsidy. This summer, many Republicans in Washington voted to end the $6 billion-per-year ethanol subsidy. Though it ultimately survived, subsidies have become a rallying call for fiscal conservatives looking to cut waste and Tea Partiers who don’t want government ‘picking winners and losers.” No other candidate is as uncompromisingly for the subsidy than Newt. Mitt Romney, who has been vague on the issue, most recently says that while he initially supported the subsidy, should not “go on forever” — hardly a comforting position for Iowa farmers. Rick Perry, Michele Bachmann, Rick Santorum, and Ron Paul have all come out against the subsidy.  [More]

Finally, the antipathy on the right for the EPA doesn't really reassure ethanol producers either.

You live by the subsidy, you die by the subsidy, I guess. In this case it looks like the whole political spectrum is a threat.

A man and the moon...  

Simply amusing and amazing photos.
 

[Even more]

Good grief - Yoda was right!...  

We may have found "THE FORCE".

This could be the announcement we've all been waiting for.
As soon as the Large Hadron Collider (LHC) revved up its supercooled electromagnets in 2008 -- which promptly "quenched" (read: broke down in a very expensive way) and then restarted the following year -- it's been the one piece of news the world has been eagerly awaiting: confirmation of the discovery of one of the Universe's most secretive particles -- the Higgs boson.
After gazillions of particle collisions and countless rumors of Higgs discoveries, we have... yet another rumor of a Higgs discovery. But this time, the rumor seems to be meatier than ever.
...
According to comments left on a number of particle physics blogs, the word is that the LHC is closing in on the Higgs.
The Higgs boson is theorized to be the "force carrier" of the Higgs field -- a field thought to permeate the entire Universe, endowing matter with mass. Only by using powerful particle accelerators like the LHC do we stand a chance of seeing these mysterious particles. [More]

I can't wait for Sheldon to explain it all on an upcoming The Big Bang Theory.

[Insert your joke here]

And also with you.

Freeze! [or] Panic!...

Even in this time of starkly divergent and entrenched positions in public debate do you simultaneously run across two well-reasoned arguments that both appeal and completely contradict.

First, this truly depressing information about the new urgency in reducing carbon emissions, since a 2℃ rise (the popular target maximum) will be much worse than we had previously calculated.

The thing is, if 2 degrees C is extremely dangerous, 4 degrees C is absolutely catastrophic. In fact, according to the latest science, says Anderson, "a 4 degrees C future is incompatible with an organized global community, is likely to be beyond 'adaptation', is devastating to the majority of ecosystems, and has a high probability of not being stable."
Yeeeah. You'll want to read that sentence again. Then you'll probably want to pour yourself a stiff drink.
Obviously, "incompatible with an organized global community" is what jumps out, but the last bit, "high probability of not being stable," is equally if not more important. One of the most uncertain areas of climate science today has to do with feedbacks -- processes caused by climate change that in turn accelerate (or decelerate) climate change. For instance, heat can melt the Arctic permafrost, which releases methane, which accelerates climate change, which melts more permafrost, etc.
Based on current scientific understanding, positive climate feedbacks -- the ones that accelerate the process -- considerably outweigh negative feedbacks. At some level of temperature rise, some of those positive feedbacks are likely to become self-reinforcing and effectively unstoppable, no matter how much emissions are cut. These are the "tipping points" you hear so much about.
But at what level? Will hitting 2 degrees C trigger runaway positive feedbacks? It's difficult to know; this is one of the most uncertain areas of climate science. James Hansen thinks 2 degrees C will do it. Others disagree.
But the situation becomes considerably clearer around 4 degrees C. At that level, there's good reason to believe that some positive feedbacks will become self-reinforcing. In other words, 4 degrees C would very likely be a way station on the road to much higher temperatures. [More]

There is an excellent presentation of the paper supporting this stance here. Not a lot of laughs. But it does mesh well with other research about the consequences of even small temperature increases on what we view as "normal" climate.

But the real stunner was this economic perspective from a econoblogger rising in the ranks, Karl Smith.

I hold these positions

1. Climate Change is almost certainly real
2. Humans are almost certainly causing it with carbon emissions, deforestation and domestication of animals
3. There will be large environmental costs associated with climate change include a very rapid increase in extinctions
4. There are likely to be major population dislocations because of climate change
5. There are likely to be major agricultural shifts because of climate change.

Nonetheless, we should pursue the development of fossil fuels as rapidly as possible including looking for ways to streamline regulation in North American regarding fossil fuel production. [More]

Smith goes on the the argument that since we can't reach emissions goals without deep economic sacrifice, we have to bet the globe on advancing technology fast enough to enable a solution to be found in the future.

This strikes me as a pretty gutsy position, but his case has merits. However, as the research like the first case continues, if it shows even worse outcomes than we are imagining now from temperature rises, the tradeoff suggested by Smith becomes an ever worsening gamble. He could still be right that since we don't show any interest in taking the threat seriously yet, at least in the US, betting on a future miracle may be our default non-decision.

But the odd and consequences of being wrong approach catastrophic.

On a slightly related note, I think Huntsman may be feeling some love from anybody-but-Mitt Republican voters and bigwigs, as he suddenly decided to backtrack on his courageous climate-change stand.

Jon Huntsman used to believe climate change is real. Now he’s not so sure.
In a move that’s sure to endear him to the conservatives who are starting to warm up to the former Utah governor, Huntsman said Tuesday under questioning from TPM that he now believes there’s “more debate yet to play out” before we can be sure climate change is really happening.
That’s certainly not the way Huntsman sounded waaay back in August, when he famously tweeted:

“To be clear, I believe in evolution and trust scientists on global warming. Call me crazy.”

That was part of an organized effort by Huntsman to be the sane one when it came to climate science. In an interview with Time, he said it this way:

“I’m not a meteorologist. All I know is 90 percent of the scientists say climate change is occurring. If 90 percent of the oncological community said something was causing cancer we’d listen to them.” [More]

Seems like a lot of folks are betting on a) a Gingrich implosion, and 2) a Romney closure failure. And I suppose climate change is an easy issue to play fast and loose with on the right. Ron Paul may be cornering the market in consistency and principle.

You can run...  

But you can't hide. I'm talking about hot money looking for safe place to live - theme that shows up constantly in my posts, I now realize.

I would guess I'm not surprised because I am ~130% invested in farm land, which not only has been safe for the last few decades, but lucrative. But if you are not a land nut, choices for safe investment are not ample.

You’ll find the above on page 143 of the Credit Suisse 2012 Global Outlook, which we’ve stuck in the usual place.
It shows how the world’s outstanding stock of safe haven assets denominated in either dollars or euros has evolved, adjusted to account for the Fed’s purchases of US Treasuries and other assets in recent years as part of quantitative easing.
You can see just how impressive the decline has been since 2007, and we’d also note that if Credit Suisse had been feeling uncharitable, they would have been justified in excluding French sovereigns.
The chart helps explain much of what’s happening in global financial markets now, especially in Europe (not on its own, mind you — we said “helps” explain):
– Begin with the ongoing collateral crunch, and how the decline of safe assets is directly tied to the dramatic fall in the availability of high-quality collateral in European lending markets. So much of it is now encumbered via direct bilateral funding agreements or by sitting at the central bank drawing liquidity. [More]

While I kinda thought this was happening, the scale of the shrinkage was alarming.It also makes me wonder, what will have to happen to make stuff that was downgraded upgraded in the future? I suspect only significant time and good performance.

Baby, we are drilling...  

Once oil companies began including the full costs of sourcing in developing nations, the economics of producing at home, or at least countries with functioning democracies, looked a little better.

Now, in a sense, the choice has been made for them. Big onshore fields in the world's most prolific hydrocarbon provinces are increasingly the preserve of national oil companies, state-owned behemoths like Saudi Aramco and Russia's OAO Rosneft and OAO Gazprom. For foreign majors like Royal Dutch Shell PLC and BP PLC, their former heartlands in the Gulf sands are now largely off-limits.
Shut out of the Middle East, they have responded with a huge push into new areas, both geographic and technological. Over the past few decades, they have built vast plants to produce liquefied natural gas, or LNG. They have drilled for oil in ever-deeper waters, ever farther offshore. They have worked out how to squeeze oil from the tar sands of Alberta. And they have deployed technologies like hydraulic fracturing, or fracking, and horizontal drilling to produce gas from shale rock.
Wood Mackenzie, an oil consultancy in Edinburgh, says that more than half of the international oil companies' long-term capital investments are now going into these four "resource themes"—a huge shift, considering how marginal the companies once considered them.
There are also drawbacks to the new focus on nontraditional kinds of hydrocarbons. Environmentalists strongly oppose shale-gas extraction due to fears that fracking may contaminate water supplies, the oil-sands industry because it is energy-intensive and dirty, and deep-water drilling because of the risk of oil spills like last year's Gulf of Mexico disaster.
There are financial considerations, too. While conventional assets are relatively easy to develop and historically have offered good returns, projects in some more technically difficult sectors—like deep-water and LNG—typically take longer to bring on-stream, and are higher cost, meaning returns are lower.
But there is an upside for the majors. "The silver lining is the shape of the profile of these projects, which is different than conventional ones," says Simon Flowers, head of corporate analysis at Wood Mackenzie. LNG ventures, for example, can deliver contract levels of gas at a steady rate over 20 years. "So the returns may be lower, but overall you have a more dependable cash-flow stream," he says.
By pursuing these nontraditional fuels, the oil companies are committing themselves ever more deeply to the wealthy nations of the Organization for Economic Cooperation and Development. Wood Mackenzie says $1.7 trillion of future value for all the world's oil companies—52% of the total—is in North America, Europe and Australia. The consultancy has identified a "significant westward shift" in oil-industry investment, away from traditional areas like North Africa and the Middle East "towards the Brazilian offshore, deepwater oil in the Gulf of Mexico and West Africa and unconventional oil and gas in North America." And then there's Australia, far out east, "which is in the early stages of a spectacular growth phase." [More]

While I was impressed with the possibilities for domestic natural gas production, once again I was several beats behind the march away from the Mideast.

It would be ironic if after pouring enormous resources of every kind into that area, it becomes a auxiliary supplier for the US.

Meanwhile, the mismanagement of Russia's resource-based economy seems to have been noticed by its citizens.

First, political optics are particularly important in Russian politics. Mr. Putin has always promised stability, and this was based to a significant degree on his perceived invincibility and the power of deterrence that his rule, via the “power vertical” system, conveyed. There was a sense of inevitability to his policies, reinforced by the strength of both his personality and of the political machinery supporting him. Mr. Putin, therefore, looked to elections as in part a legitimizing ritual in a political order that – as it moved ever further away substantively from Mr. Medvedev’s declarations of fealty to democracy – has come to occupy an increasingly thin border between limited democracy and full authoritarian rule. Yet, with the regime’s invincibility now severely dented, critics and opponents will undoubtedly be emboldened in opposing government policies, challenging the pervasive corruption, and demanding a fairer distribution of incomes and resources at a time when Russia’s one-dimensional, resource-driven economy, is confronting growing challenges.
Second, Mr. Medvedev’s future itself has become cloudy. He had to deliver the votes during the parliamentary election if he was to be given the prime ministership. He had already lost whatever credibility he had with the electorate with the closed-door decision to switch the two top governing positions. Now, despite all of the administrative advantages that the ruling party had – where it could mobilize workers; control the television medium; use its judicial connections to fine Russia’s leading independent vote monitor, Golos, for alleging electoral violations; employ other connections to mysteriously shut down communications broadcast from independent radio stations such as Ekho Moskvy, and blogging platforms such as LiveJournal; as well as the widespread, scathing allegations of thousands of violations of electoral rules by external and internal observers – United Russia still had a relatively poor showing. Mr. Putin has a history of not tolerating politicians who do not deliver as he expects.
Third, the election is also an indicator of a brewing legitimacy crisis in Russia. As the late Harvard scholar Samuel Huntington wrote, “performance legitimacy” plays a critical role in authoritarian regimes. When Mr. Putin was able to deliver growth and increasing public goods to the population, the legitimacy of his rule seemed solid because he reinforced it with an image of personal vigour and determination. Given Russia, however, is confronting massive structural problems due to its reliance on energy, with the vast Reserve Fund used to prop up the economy during the recession now largely depleted, and a demographic time bomb of extremely low birth rates, a shrinking population and a disintegrating health care system, not to mention an outflow of funds to Western safe havens, performance legitimacy is an increasingly less viable option within Mr. Putin’s social contract that trades freedom for security. [More]

While not the only vehicle, I think this is another piece of evidence that the Internet will increasingly play a bigger though as yet undefined role in public policy development and politics. And I mean everywhere.

[Note: Re-reading this, I realized it maybe should have been two posts, but one thing reminded me of the other. And you learn to write it down immediately. This is how 60+ year-old minds work.]

[Oh yeah - yours will too.]

Morality and debt...  

There has been a robust debate in the econoblogs regarding the Eurozone crisis and how the economic strength of Germany does or does not grant them the moral "high ground".  I have noticed this is often how debtor/creditor arguments devolve - the virtues of the lender versus the vices of the borrower. Tyler Cowen does an excellent job of listing the facets of this debate, and sums up this way:

I believe that the Germans have approached this crisis with some bad economic theories, a lack of understanding of how government spending cuts can be self-defeating in the short run, and a good deal of more or less deliberate self-deception about its partners in the union, not to mention Germany’s own ability and willingness to act “fully European.”  I’m also not sure that Germany has a path out of this which leaves their own financial system intact.  You can rack up the moral and practical minus points there in considerable number.  That said, I see a lot of intellectuals dismissing the perspective outlined above, rather than figuring out why it makes so much sense to so many people, not just in Germany.  I think the financial elites in the periphery countries themselves actually see it quite clearly.

The result is significant misunderstandings about what can happen and will happen in the eurozone.  Germany cannot and will not drop its moral perspective, even if there is some theory — and yes theory is the right word here, because no one knows these broad guarantees will work — of how a broader and far more costly commitment can set things right.

In reading American discussions of the eurozone, I am frequently reminded of earlier discussions of the Soviet Union.  Most outsiders simply didn’t realize how little social capital was left in the system, though some of the Soviet insiders did.  Might the same be true of the eurozone?  I’m not calling these countries corrupt, rather there may be remarkably little cross-national cultural capital, and remarkably little deep public support for a costly EU bargain, so little that many German (and other) insiders know that no grand bargain can be sustained or even seriously attempted.

I believe we need to be exposed to this moral perspective, and this intellectual Turing test, as a bracing slap in the face, as a wake-up call, and I see our unwillingness to do anything with this perspective, other than summarily dismiss it as a kind of tragic juvenile moralizing, as a sign of our own decline, right here in the USofA.

But it's the same transaction, people!  How can lending be an act of moral superiority and the borrowers' actions be cast as morally suspect? If nothing else, hasn't the lender then engineered the "fall" of the borrower?

To be sure, the economic and cultural character of Germany resonates with the "work ethic" moral training remains a powerful part of Western societies: hard work, thrift, gratification delay, self-determination, etc. But I think we may be outgrowing those values or at least failing to modify them to present economic realities.

One of the most powerful of these new realities is the abundance of wealth. In the face of that surplus the choices for investors are not always an array of solid, high return productive assets, but a sorry collection of higher-risk, low yield instruments. I do not disallow the German culture its moral high ground connected to thrift and good choices, but I do wonder why they should not bear responsibility for their investment choices - both private and public. Why were they pouring money into Greek, Spanish, Irish debt to such a degree they could not suffer bad consequences? Aren't they guilty of bad investment strategy at least? Should not they bear the consequences of buying junk?

This is the dilemma of capital surplus countries and individuals. You will seldom find another place to park your money as "virtuous" as your own business, since they would likely be in capital excess, too.

Meanwhile, Ezra Klein reports from the financial front lines.

Over the course of dozens of interviews conducted in Berlin over the last few days, I've spoken to members of Angela Merkel's government, members of the opposition Social Democrats, industrialists, and bankers. No one has evinced even the slightest willingness to see the euro zone crack apart. But nor have they quite said they're willing to save it. Rather, they remain serenely confident that they will save it. But they don't have a surefire strategy. They have a bet. A big one.
That's really the key to understanding the German psychology on the euro. In America, we keep asking why they don't join with the European Central Bank to end the run on the European periphery. The answer is simple: they don't want to end the run on the European periphery. To them, the run on Italy and Greece and Portugal and Spain is a feature, not a bug. It's leverage, and they want to use it.
Look how much it has already gotten them. Greece, Portugal, Italy and Ireland are working their way through stringent deficit-reduction plans. The widely disliked governments of Greece and Italy, which proved unequal to the task of fiscal reform, have been toppled. There is a good chance that the euro zone might become what Germany has always wanted it to be: a fiscal union, in which the members meet their deficit targets and reform their labor markets. And none of this would have happened without the markets making their run at the European periphery.
So to understand the German position, look at it from their perspective: Why in the world would Germany let up the pressure now? When they're so close to amending the very treaty underlying the euro zone? When France has joined with them on a set of reforms? When the market is doing what the Germans never could?
I worry this makes the Germans sound like puppetmasters. They're not. Many of their intended reforms are very sensible. The flaws they point to in the euro zone are, indeed, deep, structural flaws in the euro zone. They do envision a future that includes sacrifice on their part: eurobonds that raise Germany's cost of borrowing and a bailout fund -- excuse me, a fiscal stabilization fund -- that they contribute heavily to.
So my concern isn't that the Germans are selfish and calculating. It's that, without quite realizing it, they have become reckless. They are trying to time the market, betting that they can, in essence, manage the run -- that they can do just enough to keep the pressure on without letting matters get totally out of hand. They are like a doctor who, faced with an unhealthy patient presenting signs of a heart attack, demands to see the patient lose weight before they will administer the life-saving treatment.
In almost all of their arguments, the Germans are right. The euro does need to be fixed. But first it needs to be saved. The Germans are betting that this is their opportunity to do both. If they're right, it will have been a remarkable play. If they're wrong, it will have been a disastrous one. [More]

It will be some time featuring very low rates before this curious economic puzzle gets solved. The idea of excess money struggling to get a return despite being the trophy of economically prudence and self-discipline will take some time getting used to. My guess is we are nearing that time as the last of the ~5 year investment instruments roll over into sub 1% territory. I'm seeing it at my bank, and now in Europe.

[Update: Rats! As soon as I labored through this post, Kevin Drum explains it much better. And with punctuation, spelling and charts. It's a must-read for those newly interested in the euro.]

Savers need borrowers just as much as the reverse. Meanwhile, the ag markets have a huge stake in this political turmoil as we obviously miss the extra money in the pits.

Add Danforth...  

The roll call of Republicans aghast at their own party grows. His defense of Sen. Lugar, whom I consider to be one of the best the GOP has ever had, is priceless.

Republican John Danforth, who served as a senator from Missouri for nearly 20 years and later as George W. Bush’s ambassador the United Nations, is not happy with the slate of Republican presidential candidates. “I’ve been watching some of these Republican debates and they’re just terrible. Terrible,” he told KTRS in St. Louis yesterday. “It’s embarrassing for me as a Republican to watch this stuff,” he added, calling out audiences for applauding the candidates’ morbid boastings. [More]

 If the GOP sinks to nominating Gingrich, it could mark the low water point, IMHO. 

One more reason...  

Why I would have died a flaming death in corporate America: marketing campaigns. I try to imagine having a meeting with these people.

Below are some highlights. Warning: We are about to enter the strange arena of marketing, where fictional worlds are conjured up out of whole cloth for the sole purpose of moving goods.
From what I can tell, the intention expressed here is to brush up the image of Hillshire Farm and roll out two new premium brands: "Smith & Smith Fine Meats" and "Flat Iron Ranch." The campaign is "foundational," the one slide declares, "and demonstrates how the new, purposeful Sara Lee will manifest: Modern. Authentic. Simple."

Seriously, if you can't sense a wind change in the meat industry from this, what will it take? It looks to me you're going to have to be able to fake "sustainability" and "humane production" at the very least.

 

My new crusade...  

 Why I use credit cards:




[via mr]

Wish I had said it...  

"Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world."

[Source?]

Another subculture...  

I pretended didn't exist.

 

In fairness, it's not much different than dog shows, IMHO.

Just not as upscale, I guess.

Newt...  

Why implausible is the new possible.

Junkbox, Episode YULEIX...  

Some quickies for starters.

• I'm not the only one hating on the new Coke cans.
• No left turns. (Thanks, Jack)
• Economic Buzzword of the Day: Giffen good
• No doubt you heard we are now a fuel exporter
• Wait - maybe farmers do ♡ regulations
• Gary Schnitkey should write horror movies.

A squirrel ate my Internet...  

This could become Numero Uno in my Timeless Excuses List™. I was getting intermittent signals from my WAN radio and it finally gave up altogether this week after over 4" of rain* last week.


The coax cable was leaking water from outside into the power port.  A squirrel (my guess) chewed the insulation off up by the receiver. 


I just can't take the fuss of posting from the iPad so I went dark, and surfing was so slow I fooled around getting the floor finished in the new woodshop. We're back to a full 5 Megs without periodic hangs to boot, so life is good. I"ll try to get some stuff up this weekend.

*November is now my wettest month at 8.1". Go figure.