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Global financial system implosion begins

spring-peeper said:
Since this is on global finances....

Have any of you heard about the proposed bank tax that is supposed to be discussed at the next G8/G20 meetings?

From what I've gleaned, the idea is to put a tax on the banks and use it as a reservoir of types to ensure that sufficient funds are available to bail out the financial sector should problems happen again.

It's a nice idea - if your banks failed and you had to bail them out.

Ours didn't - our only real expense (from an Ontarian view point) was bailing out the auto industry.

Our prime minister is on a mission to stop the global bank tax. He thinks that our banks performed well and shouldn't be penalized by adding extra taxes. As a consumer, I know this tax will be paid for by increasing my banking costs.

To date, the only country that seems interested in helping to stop this global tax is India.

After reading some of the German comments, I think that they will be pushing for the tax. iirc - the US is in favour of the tax.

If any of the economic experts on this board could comment on this, I'd appreciate it. I keep reading the documentation on the issue, but I have always found that U75 explains it better.

Anyone???
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Well since my former homeland of Canadia is not an autarchic DPRK style economy, you'll still need to export - so I'd say it's in your interest to assist in global reforms, even if you were smart and canny enough not to stick your collective hand in the fire in the first place.

PS - your current PM is a c*#@ who'd bring shame on Fianna Fail or the Monday Club, let alone a civilised nation like Canada.
 
Barking_Mad said:
This bloke needs some anti-depressents! ;)
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We will all be needing happy pills in the coming years.

Mortgage applications for home purchases plummeted last week in a worrisome sign that consumer interest may have fizzled with last months' expiration of an $8,000 homebuyer tax credit.

The Mortgage Bankers Association said Wednesday that mortgage loan applications for home purchases for the week ended May 14 fell 27 percent from a week earlier, to the lowest level of applications in 13 years. Applications have declined almost 20 percent during the past month.

"This was a big drop, there's no doubt about it," said Michael Fratantoni, the trade group's vice president of research and economics. "The whole housing mortgage sector is going to have a couple months of pullback. This will probably be wrung out of the system by late summer or early fall."
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Chicago Tribune

So stimulus is being withdrawn for house purchases. The result is a big drop in people buying. Quelle suprise. Negative pressure on housing prices and what is the one leading indicator of a home defaulting on mortguage payments? Being underwater, having more to pay off on the loan than the house is worth.

Jobs market in the UK is not looking good either.

In Europe it appears there is a debt crisis growing at sub state level as well. Nothing like we see in the US with cities and states (California, Jackson County, that sort of thing.)
The crisis in the eurozone is making headlines at the moment, but at a lower level another debt storm is slowly brewing. European cities and regions are expected to flood the market this year, all anxious to fund ballooning deficits. Local and regional government borrowing is expected to reach a historical peak of nearly €1.3 trillion, according to credit ratings agency Standard & Poor's (S&P). The bulk will come from the highly decentralised German Länder (states) and from the deficit-ridden Spanish regions, which face severe central government transfer cuts. Regions also face higher borrowing costs and, most likely, further credit downgrades.

We expect a significant increase in [debt] issuance in Germany; German borrowers have huge refinancing needs and they're running deficits," said Myriam Fernandez, head of European local and regional government ratings at S&P. "And in Spain, where there is a need to roll over debt, and there are high deficits in 2010, we could see further downgrades for local and regional governments."

S&P recently cut the rating of Madrid, whose debt is expected to remain between 155%-170% of expected revenues until 2012. Madrid went through a spending spree during the boom years, investing millions in infrastructure projects, such as covering up the ring road around the capital. Valencia also spent huge sums in international attention-grabbing events such as the America's Cup or a Formula One grand prix.
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Link

Then there are the cuts to come in Europe as stimulus is withdrawn......
 
On the brink of a new age of rage By Simon Schama. FT May 21 2010
Interesting opinion piece by the well known revolutionary.

Act two is trickier. Objectively, economic conditions might be improving, but perceptions are everything and a breathing space gives room for a dangerously alienated public to take stock of the brutal interruption of their rising expectations. What happened to the march of income, the acquisition of property, the truism that the next generation will live better than the last? The full impact of the overthrow of these assumptions sinks in and engenders a sense of grievance that “Someone Else” must have engineered the common misfortune. The stock epithet the French Revolution gave to the financiers who were blamed for disaster was “rich egoists”.
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I see Roubini notes that the money-juggling parasites are still up to their old tricks, setting the stage for an even bigger crash:

'Dr Doom' warns banks 'planting seeds' of crisis

It's back to business as usual, lots of leverage, lots of risky investments and return to high profits based on subsidies by the government, bonuses, salaries - you name it.

So we're planting the seeds of the next financial asset bubble
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Only a link to The Express I know but Germany rumoured to be commencing the re-printing of Deutsche Marks :hmm:


GERMANY MARKS ITS TERRITORY

Germany could be printing Deutsche Mark bank notes in preparation for dropping the euro

GERMANY is rumoured to be printing Deutschemark banknotes again in preparation for ditching the euro and distancing itself from Greece and the other ailing states that started the sovereign debt crisis.

As fears mount about the survival of the euro, it is said Germany’s central bank, the Bundesbank, has been ordered to print new marks as part of contingency plans to leave Europe’s single currency.

This would be an extraordinary step for Germany and would deepen the growing divide between Europe’s leading states. Since its introduction in 1999, the euro has had a tough time trying to win over a sceptical German public, who saw the mark as a symbol of their post-war prosperity. Regarded as one of the world’s most stable currencies, it was second only to the US dollar as the reserve currency of choice for investors and governments.

Despite the joint €750billion euro European Union-International Monetary Fund bailout package unveiled this month, there are growing fears that it will not be enough to save Greece, Spain, Portugal, Italy and other states from financial collapse.

If the bailout package fails to stabilise Europe and the euro, analysts fear the global economy could plunge back into recession.

UBS analysts Paul Reynolds and Joelle Anamootoo said: “If the rescue programme fails altogether, we are looking at a potentially much more negative picture.”


http://www.express.co.uk/posts/view/176668/Germany-Marks-its-territory-


Can't find any other more reliable sources though.
 
Roubini chooses his words very carefully - he could have went further of course and been more stark about things - but I completely concur with his sentiments overall. Ultimately, people need to make up their own mind. Take a step back and take a more macroscopic/panoramic view, taking into account political and ecological events, as well as the economic scenarios that Roubini specialises in. Visualise the ripple effect of recent world events, factoring in the rapid escalation of national revolutions (fuelled from within and without) and the rapid deterioration of global ecosystems. This is something that just got a whole lot worse with the disaster in the Gulf of Mexico. And we ain't seen nothing yet, when it comes to the ramifications of that, particularly as concerns its impacts on the global human carrying capacity.

More on this topic below:
http://globalguerrillas.typepad.com/globalguerrillas/2010/05/leaking-legitimacy.html
 
goebfwai said:
Roubini chooses his words very carefully - he could have went further of course and been more stark about things - but I completely concur with his sentiments overall. Ultimately, people need to make up their own mind. Take a step back and take a more macroscopic/panoramic view, taking into account political and ecological events, as well as the economic scenarios that Roubini specialises in. Visualise the ripple effect of recent world events, factoring in the rapid escalation of national revolutions (fuelled from within and without) and the rapid deterioration of global ecosystems. This is something that just got a whole lot worse with the disaster in the Gulf of Mexico. And we ain't seen nothing yet, when it comes to the ramifications of that, particularly as concerns its impacts on the global human carrying capacity.
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Masturbatory.
 
I've heard that the financial sector s dealing and speculating on environmental futures and scares resources further damages the natural environment. Could anyone who knows illustrate how this can be if it is all taking place "virtually" so to speak.
 
Aquamarine said:
I've heard that the financial sector s dealing and speculating on environmental futures and scares resources further damages the natural environment. Could anyone who knows illustrate how this can be if it is all taking place "virtually" so to speak.
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CBOT offers an array of derivatives to hedge risk - eg Hurricane / Frost / Snowfall / catastrophe insurance

In terms of extractive & agricultural , then another array of commodity futures/ Options are availae for literally anything that can mined or grown. As well as OIl Obv.

Both of these categories offer the chance to punt on prices ( which are dertnined by supply / which is determined by production/ which is determined by the situation on the ground / which is affected by Environmental isses etc etc etc )

this isnt new , indeed, ET derivatives began as a tool for farmers to cover the uncertainties on their crop yield. etc

You wanna punt on the world uranium supply after a nuclear accident ? here we go

http://www.cmegroup.com/trading/metals/other/uranium_contract_specifications.html
 
This thread is becoming too full of loonspuds forecasting the death knell of the global economy without actually appearing to understanding what an economy is and how it's way more robust than people make out.
 
goebfwai said:
The Gulf Oil Spill. An ongoing challenge to global ecological systems - and transnational economies. Fantastic - and horrifying - audio slideshow from photographer Daniel Beltran
http://www.guardian.co.uk/environment/interactive/2010/may/25/deepwater-horizon-oil-spill-oil
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No more of a challenge than the Exxon Valdez was, and despite what conservation groups like to parrot about inevitable disaster, regional ecosystems repair themselves well, just not over the kind of timescale humans appreaciate that well (100 years or so).

The biggest difference between this and the EV spill is the location - there wasn't anything like as much industry off the coast of Alaska as there is around the Gulf of Mexico (plenty of wildlife tho), and this is why it's a bigger human issue.
 
not-bono-ever said:
CBOT offers an array of derivatives to hedge risk - eg Hurricane / Frost / Snowfall / catastrophe insurance

In terms of extractive & agricultural , then another array of commodity futures/ Options are availae for literally anything that can mined or grown. As well as OIl Obv.

Both of these categories offer the chance to punt on prices ( which are dertnined by supply / which is determined by production/ which is determined by the situation on the ground / which is affected by Environmental isses etc etc etc )

this isnt new , indeed, ET derivatives began as a tool for farmers to cover the uncertainties on their crop yield. etc

You wanna punt on the world uranium supply after a nuclear accident ? here we go

http://www.cmegroup.com/trading/metals/other/uranium_contract_specifications.html
Click to expand...

Didn't the futures & derivative market as a whole originally start as an agricultural thing? I'm sure I read that somewhere...
 
kyser_soze said:
"No more of a challenge than the Exxon Valdez"
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Now I've seen everything. This must rank as the understatement of the century. A vast bank of scientists and other reports describing the leak variously as 10-20 times worse than initial estimates. The volume being released being roughly the equivalent of an Exxon Valdez sized spill vomited into the oceans every 4 days. And we're now nearly 40 DAYS into the disaster, which still hasn't ended. :rolleyes:

kyser_soze said:
"ecosystems repair themselves well, just not over the kind of timescale humans appreaciate that well (100 years or so).
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In the context you've used it the word "appreciate" is an anodyne word that disguises myriad personal, environmental and animal sufferings that this disaster has unleashed.

But I agree. There are certainly few fishing families and all the myriad knock-on industry livelihoods and households dependent on a healthy ocean - one free from cubic miles of crude oil floating about in it (one of the most highly toxic and carcinogenic substances around) - that could wait 100 years for ecosystems to repair. They certainly wont "appreciate" that and such 'move along plebs it's nothing to concern yourself with' damage limitations tactics one iota. :(
 
kyser_soze said:
No more of a challenge than the Exxon Valdez was, and despite what conservation groups like to parrot about inevitable disaster, regional ecosystems repair themselves well, just not over the kind of timescale humans appreaciate that well (100 years or so).

The biggest difference between this and the EV spill is the location - there wasn't anything like as much industry off the coast of Alaska as there is around the Gulf of Mexico (plenty of wildlife tho), and this is why it's a bigger human issue.
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A wide number of industry experts are also raising concern with the depth of the spill and how much of it is remaining in deeper water. A couple of big storms will do more to break up this spill than all the efforts by man who just tend to be holding operations till the weather system does its thing.

But this spill may yet prove to be qualatitively different to Exxon Valdez in that oil may not be broken up by a big storm.

And while crude\ mineral oil is endemic to the regional enviroment through leaks hence the enviroment has mechanisms for dealing with it, large scale releases of hydrocarbons from fossil plant sources can hold relatively high accumulations of heavy metals. Most especialy mercury.

Also some spieces such as Manatees are under so much pressure as it is, something like this could be truly devestating for them.
 
Actually there are no accurate estimates - they vary wildly depending on whom you ask from 7 or 8K a day to 70K a day (which would still be nothing like your 'EV spill every 4 days' hyperbole). As for the rest of your post - well it's a case of tough titties for the locals really; it's not like they aren't part of the most carbon dependent society on earth or anything.
 
I am continually impressed by the number and scale of things about which you are blasé, K :cool:
 
Shit'll either fix itself or it won't. It's the same with AGW, peak oil and the rest of it - we'll either find workarounds and develop new technologies/solutions to deal with the 'forthcoming end of the world', or we won't. I can't be arsed getting wound up by that level of existential threat (and if I let myself it can happen). The endless mongering of doom is as old as the hills, as are the claims of those who have all the required information to cast their augeries about how bad it's all going to get.
 
kyser_soze said:
Actually there are no accurate estimates - they vary wildly depending on whom you ask from 7 or 8K a day to 70K a day (which would still be nothing like your 'EV spill every 4 days' hyperbole).
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The reason there is no accurate data are that BP have refused to let independent scientists do any claiming that, "it isn't relevant to the response and such efforts might distract from the response"(as if stopping the flow isn't dependent on the amount of oil coming from it!) The ones that have been done suggest that BP's estimate of 5,000 bpd, which was based on the oil sitting on the surface of the ocean from satellite photos) were most likely to be a vast underestimate. This is backed up by the fact that massive plumes of oil are to be found under the surface,

On May 15, researchers from the University of Southern Mississippi aboard the research vessel RV Pelican identified enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles (16 km) long, 3 miles (4.8 km) wide and 300 feet (91 m) thick in spots.
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20,000 bpd would now = 680,000 barrels or just short of 3 times the amount of oil spilt by the Exxon disaster
50,000 bpd would now = 1,700,000 barrels or 7 times the amount of oil spilt by the Exxon disaster.

Still catastrophic by any standards.

As for the rest of your post - well it's a case of tough titties for the locals really; it's not like they aren't part of the most carbon dependent society on earth or anything.
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:rolleyes:
 
Might be worth pointing out that this oil field had an estimated 50m barrels of oil in it which by 2007 estimates would have only provided enough oil for the USA for just over 2 days of use.
 
kyser_soze said:
Didn't the futures & derivative market as a whole originally start as an agricultural thing? I'm sure I read that somewhere...
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Rice futures in Japan circa 16th century iirc, altho there seemed to have been some sort of OTC futures on cargoes bought back by the old merchant adventurers a century or so earlier
 
kyser_soze said:
"estimates - they vary wildly depending on whom you ask from 7 or 8K a day to 70K a day (which would still be nothing like your 'EV spill every 4 days' hyperbole)."
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You got some stocks left you've still to sell or something? Doubt is our product, is it? Come now. Both you know and I know that your comment is quite simply an attempt to mislead. Aside from playing a somewhat elitist role in helping prevent worrying 'the natives', downplaying the disaster doesn't help in the least in fixing it.

"The Exxon Valdez tanker ran aground on the Prince William Sound on March 24, 1989, spilling 10.8 million gallons of crude oil into the sea" http://www.physorg.com/news190463110.html
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BP had stuck by its first estimate that some 5,000 barrels, or 210,000 gallons, a day of oil was leaking from the well - despite claims from several experts the real figure was at least 10 times higher. But BP spokesman Mark Proegler told news agency AFP on Thursday: "Now that we are collecting 5,000 barrels a day, it might be a little more than that." http://news.bbc.co.uk/1/hi/world/us_and_canada/10134881.stm
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On one side you have several impartial experts all agreeing that the spill is AT LEAST 10 x greater than 210,000 gallons a day (and it could be much, much more) pitched against an earlier partial spokesperson expert from B.P. They initially tried to hoodwink people by telling folk that it was 210,000 gallons a day. The spokesman above acknowledges that having put in a pipe to siphon off some of the leaking oil they are actually collecting roughly 210,000 barrels a day (and it's still gushing like billy-o). They now acknowledge that the leak "might be a 'little' more than that" (i.e. with the word 'little' in B.P. doublespeak meaning "a lot").

If 2.1 million gallons a day of crude oil MINIMUM are gushing from the exposed pipes - and Exxon was 10.8 million gallons - that means roughly an Exxon Valdez sized spill is being spewed into the Gulf of Mexico every 5 days. If it is 20% worse (and it could be, and indeed most probably is much, much worse than even that) then it is an Exxon Valdez every 4 days. The depth of the ongoing spill (a mile down) and possibly the higher pressure at low depths means that - compared to surface spills - what is reaching the surface is only the tip of the proverbial 'oil-berg', if you'll pardon the pun. Vast undersea plumes tens of square miles in size, several hundred feet deep are accumulating in the oceans depths, as I and BM have pointed out earlier.

Leave aside the statistics and the estimates for just one moment. Logic and common sense tells you that a month old, 5000 barrel/210,000 gallon a day spill can't possibly create such a spectacle.

Latest estimates I've read is it could be a further 2-3 months before it's fixed (that's assuming they actually can). One month on your looking at a spill that is already roughly about 10 times the size of Exxon Valdez (minimum). 2-3 months down the line - and counting? You do the math.

Incredibly, the Hollywood actor Kevin Costner, horrified by Exxon Valdez, set up a firm a few years ago that sells multimillion dollar industrial sub-marinal vacuum cleaners designed to hoover up large oil spills. He is now very much in demand. The man who starred in 'Waterworld', could very well save humanity from 'OceanOilworld'. Perhaps there is hope. Perhaps. http://www.independent.co.uk/news/w...leaners-to-mop-up-huge-oil-spill-1979976.html
 
Yeah, granted the oceans will recover. Given a long enough timeline - whether it be decades or a century - ecosystems always do, particularly if extra forces mobilise to help them along. But what about the situation right now? Ecologically speaking it's an utter catastrophe. Economically speaking, it's one more straw breaking the back of the global economy. True, nature and people will bounce back. That's nature. That's the human spirit.

Of course, the brutal, clinical and harsh realities of science and natural selection will ensure that the creatures that do survive the enormous challenges of oceans and a world that it is rather less hospitable to life than before will be the strongest, most inventive, and resourceful.

But all in all, right now and for the foreseeable future for quite some time to come it's a really raw deal for nature and the fish. And a rum deal for the fisherman and their customers, in the Gulf and many other places.
 
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