Global financial system implosion begins

[Treacle Toes]

I am sure we all admire his honesty

 

[elbows]

Sorting our understanding of all that stuff out is, in my personal view a really important project.

Yes. As a starting point, and since I mentioned the 'easy stuff' that was done in the shadow of the 1970s energy shocks, here is a UK government 'Energy consumption in the UK' report. The time period covered (1971-2001), the splitting down into different sectors and types of use, along with a focus on 'energy intensity' makes this report of quite some use to the present discussion. Yes its far from perfect as its only looking at the UK, and does not go into any detail about the distinctly panful and non-easy move away from heavier industries that the UK undertook which no doubt accounts for some of the more impressive decreases in energy required per unit of economic activity, but its still helpful at providing some sense of the magnitude of change we have managed in the past.

For example along with a myriad of charts, one of the things it says is:

As the economy grows and activity increases within the economy it is usually associated with rises in the production, transportation and consumption of goods and services all of which require energy. Output from the economy is measured using a constant measure of Gross Domestic Product (GDP) to remove any inflation effects. Between 1970 and 2001, GDP in the UK more than doubled. The energy ratio measures the relationship between GDP and energy consumption and has fallen steadily over the period, at approximately 2 per cent each year since 1970, and by 2001 it was 57 per cent of its 1970 value. This downward trend in energy intensity can be explained by a variety of factors: improvements in energy efficiency; fuel switching; a decline in the relative importance of energy intensive industries; and the fact that some industrial uses, such as space heating, do not increase in line with output. The energy ratio is shown in Chart 1.8.

Its pretty interesting to see what areas managed notable changes, which ones showed little wiggle room, and how easily some of the improvements were offset by changes to lifestyle. The increase in the amount of energy used to heat spaces, despite insulation measures, seemed notable to me. Those figures, along with several others such as the amount of gas used by the chemical industry, is a useful reminder that we would be unwise to come up with fixed timetables for decline when there is still considerable uncertainty about the medium-term gas picture, especially in the light of fracking. And when climate change concerns are set aside, I've seldom quite got my head round exactly how much coal will be able to fill the gap during key stages of early decline.

http://www.decc.gov.uk/assets/decc/statistics/publications/ecuk/file11250.pdf

(found on this page which has some other sets of data too http://www.decc.gov.uk/en/content/cms/statistics/publications/ecuk/ecuk.aspx )

 

[elbows]

As soon as you start thinking about that, it's pretty obvious that "business as usual" isn't going to go quietly. We can already see very clear evidence of disinformation campaigns by unsustainable industries against inconvenient science. We can see people on wingnut welfare queueing up to use PR smear tactics to present anyone who questions "business as usual" as a nutcase. We can also see, rather more insidiously, neo-liberal capitalist governments re-aligning the law in order to supress dissent in these areas. For example by redefining "terrorism" to include most effective kinds of direct action, by introducing restrictions on protest, by prioritising green organisations as a target for secret police activity (when there are actual Islamic nutbags and far right loons demonstrably trying to murder their fellow citizens rather than just annoying business interests) and of course, by stitching up the electoral system even further in the direction of only allowing neo-liberal capitalist parties to participate effectively.

The relationship between neo-liberal capitalism and unsustainability isn't a straightforward one however. For example, one of the particular characteristics of the neo-liberal variant is that it tends to promote unproductive and destabilising finance capital over productive industrial capital. So there isn't a straightforward relationship between capital's need to grow by some positive percentage per annum and, for example, energy use. If possible, neo-liberal capitalism seems to prefer to grow by generating ficticious capital, rather than by producing anything that's actually useful to people but which requires the use of oil energy rather than say, cocaine energy to create. Some analysis of this preference would be very interesting.

I don't completely agree about the reaction to green organisations. They powers that be don't like direct action that directly interferes with economic activity & exploitation of resources, but on many other levels there are indications that powerful sections of the established order are pleased that they can point to some public protest over such issues. For example the UK has found it useful to be able to claim that there s public pressure to act, when they have been negotiating stuff at global climate change type meetings.

I also suspect that minds do not like to acknowledge that they are forced into a certain course of action, we really like to pretend that we are still wearing the browsers and making choices, even when we aren't. In this sense I become interested in whether some of the 'lets act to save the planet from climate change' stuff is an attempt to pretend that we chose to change path, rather than being forced to change path by a range of factors that have nothing to do with polar bears.

The emergence not so many years ago of some prominent business leaders calling for awareness and action on peak oil was probably worth noting too.

As for your comments about fictitious capital vs producing stuff thats actually useful to people, there is probably lots to explore there, and I don't know much. Perhaps should clarify quite how far both the unproductive and productive capital labels are supposed to stretch. e.g. When you speak of producing stuff thats actually useful to people, what exactly do we mean by useful, how narrow a definition of useful?

Part of the reason I ask is because I'm very interested in how much the digital economy can actually work as a substitute on several key levels for traditional stuff that was more energy intensive. Its going to be a poor substitute in some regards, and there are some aspects of life where it is of no use at all, but it sure looks to me like it can occupy plenty of peoples time, people can be entertained, create, consume and trade digitally, and although psychologically its no replacement for travel, it can and will be able to somewhat fill that gap if we find ourselves moving through the transition in a certain kind of way over the next several decades. Its not going to feed me, but I don't mind sounding a bit wacky by pondering whether a trend towards whole-body movement games, wii & kinect for example, might come in handy if we can't keep our entire living space as warm in future as so many of us have had the opportunity to become accustomed to in recent decades.

 

[teqniq]

Nobody likes change but change we must. End of. At least imho anyway.

 

[Bernie Gunther]

<smug shitbag clip snipped>

I am sure we all admire his honesty

He's just trying to promote a position he's taken on the market I'd bet.

 

[8ball]

He's just trying to promote a position he's taken on the market I'd bet.

Well exactly. Even less honour than a basic reading would imply. We are all too charitable to this kind of scumbag.

 

[Treacle Toes]

I look forward to tomorrow's frontpages....Feral Trader Preys on the Vulnerable...

 

[8ball]

I look forward to tomorrow's frontpages....Feral Trader Preys on the Vulnerable...

Next to Hell Opens New Ice Rink

 

[Bernie Gunther]

elbows, you may already be aware of this but 'fictitious capital' is a technical term in marxist economics, and in the present context a really useful one.

butchers or someone could probably explain it better than I would, but meanwhile the paper linked below is quite useful in getting to grips with it.

Fictitious capital is, on first approach, paper claims on wealth (in the form of profit, interest and ground rent) in excess of the total available surplus value, plus available loot from primitive accumulation.

http://libcom.org/library/fictitious-capital-loren-goldner

 

[teqniq]

Fictitious capital is, on first approach, paper claims on wealth (in the form of profit, interest and ground rent) in excess of the total available surplus value, plus available loot from primitive accumulation.

or the big lie

 

[Treacle Toes]

Smoke and mirrors...

 

[elbows]

elbows, you may already be aware of this but 'fictitious capital' is a technical term in marxist economics, and in the present context a really useful one.

butchers or someone could probably explain it better than I would, but meanwhile the paper linked below is quite useful in getting to grips with it.

http://libcom.org/library/fictitious-capital-loren-goldner

Cheers. Yes Im aware of that term as used in marxist economics, but mostly only because of things people have mentioned bliefly on the forums in the past, I have plenty more to learn.

I wanted to check if thats exactly what you were talking about, or if there is any kind of grey area somewhere in between fantasy shuffling of numbers and solid useful things. I will do some reading and then see if I have anything more to say or ask about this, or whether I have gone down a dead-end.

 

[free spirit]

In case anyone's still interested, i've just done a search via google scholar, and the only reference I can find to any study that might support Falcon's claims is this reference to a 1996 analysis by Howard Odum.

the most commonly cited (indeed possibly the only) study claiming that the energy payback time of PV modules exceeds theirlifetime is Howard Odum’s “Emergy” analysis of solar cells in his book Environmental Accounting (1996).

[source]

I've not been able to find the referenced report myself, but the paper that referenced it gives 2 major reasons for rejecting the findings when discussing building mounted PV systems.

Upon scrutiny, there are two reasons why these findings can be rejected as
indicating that PV modules are unable to payback their embodied energy over their
lifetime:

The installation was a large centralised power plant. The embodied energy in
the concrete and other structures was greater than the PV cells themselves.
Frameless modules mounted on existing structures or roofs eliminate the
majority of this requirement and its associated embodied energy.

The human labour of a team of highly trained engineers required to design,
operate and maintain the plant were large portions of the energy requirement.
De-centralised roof-mounted systems also eliminate nearly all of this, as they
require very low maintenance after installation. The embodied energy in design
is also negligible due to amortization over lengthy production runs

I'm not sure if it's a coincidence or not that Odum also references largescale field mounted installations rather than the far more common building mounted systems just as Falcon does, but it seems fairly clear from this response that this simply doesn't apply for building mounted systems.

If this is the study Falcon's based his views on, I'd also have to point out that even the embodied energy within PV modules themselves has reduced significantly since 1996 through a variety of energy saving technological improvements, and economies of scale. This process is investigated for 5 years upto 2008 in this paper, which concludes...

During the last 4-5 years, the progress in the major
commercial technologies has been quite remarkable. The
EPBT of thin film CdTe dropped 15-35% and that of Si
technologies dropped 25-40% for specific companies.
The reduced EPBTs are related to the increased
efficiency and decreased electricity requirement of CdTe
PV modules and the slimmer wafers and ribbons used for
Si PV modules. There is a need for future timely updates
of the LCA data as PV technologies continue to improve

 

[ferrelhadley]

http://www.npr.org/templates/story/story.php?storyId=140803245

Worst home buying season in US since 63.

 

[free spirit]

REC, the PV manufacturer that makes claims to being the most environmentally friendly PV manufacturer in the world has just released an updated LCA for their panels, which gives a 1-1.2 year energy payback time for their panels.

This is for the panels only, but I don't see how the rest of the installation is going to add 2500% to the embeded energy of a solar PV installation, and I do know pretty well what the other LCA components of the installation would be given that this is the side of things I do day in day out.

can we lay this silly argument to rest yet?

 

[gosub]

telegraph.co.uk/finance/financialcr...-stupid-US-plans-to-boost-EU-rescue-fund.html

 

[Dr Jon]

Euro Tarp - Why It Will Be A Screaming Failure

If alarm bells aren't already going off they will be in just moment as you get the gist of the rest of this disastrous plan.

 

[camouflage]

I am sure we all admire his honesty

Actually yes, well... admire is certainly too strong a word but I don't see why the hate for this guy, he is merely speaking frankly about how he makes his living. Go short, sound advise these days in his line of work.

 

[Dr Jon]

It's not just money-jugglers that are the problem, we need to get rid of the clowns:

What governments need to do at this stage, and it's years overdue, is to ringfence their citizens, in order for them not to lose even more money than they already have. And then to combine that with a massive restructuring, with many defaults and bankruptcies, of the banking system (but without losing citizens' deposits) and the non-banking system that carry too much debt on their books.

Our present day "democratic" political systems are woefully inadequate to kick out the clowns and replace them with people that make sense, and are willing to do so for the masses.

But until we get a system that is capable of achieving this, we are in for a whole lot more misery.

Behind a painted smile.

This echoes what I was saying back in 2008: guarantee personal deposits and let the banks crash n burn. I remember Roubini shaking his head in despair / disbelief when the bailouts were first announced.

 

[A Dashing Blade]

Actually yes, well... admire is certainly too strong a word but I don't see why the hate for this guy, he is merely speaking frankly about how he makes his living. Go short, sound advise these days in his line of work.

Because that's NOT how he makes his living, he makes a very modest living giving seminars on how to trade. ie he talks the talk but doesn't walk the walk. He deliberately mouthed off to self-promote.

 

[phildwyer]

I am sure we all admire his honesty

I wonder what he means by "protect your assets?" Buy lots of tinned food?

 

[phildwyer]

elbows, you may already be aware of this but 'fictitious capital' is a technical term in marxist economics

Although a slightly misleading one, insofar as all capital is fictitious from a Marxist perspective.

 

[love detective]

perhaps to someone who hasn't read, nor understood volume 3 of Capital - but to anyone who has (and i'm sure Marx did given he wrote it) Marx's working distinction between real and fictitious capital is fairly clear and an important distinction within his overall conceptual framework - something which forms a fairly fundamental part of his theory of crisis overall

what you're doing is applying a different (your own) perspective onto something and then serving back up as though it's Marx's.

Anyone could argue that capital itself isn't 'real' from a number of perspectives but an understanding of the Marx's technical usage of ficticious capital (or anything else for that matter) isn't achieved by saying nothing is 'real'

 

[camouflage]

perhaps to someone who hasn't read, nor understood volume 3 of Capital - but to anyone who has (and i'm sure Marx did given he wrote it) Marx's working distinction between real and fictitious capital is fairly clear and an important distinction within his overall conceptual framework - something which forms a fairly fundamental part of his theory of crisis overall

what you're doing is applying a different (your own) perspective onto something and then serving back up as though it's Marx's.

Anyone could argue that capital itself isn't 'real' from a number of perspectives but an understanding of the Marx's technical usage of ficticious capital (or anything else for that matter) isn't achieved by saying nothing is 'real'

Not been following this conversation re capital, but I was under the impression that anything potentially 'productive' was considered capital, farm land, property, financial assets, big shiny chunks of industrial machinery etc...

 

[love detective]

financial assets, credit, loans etc.. are not productive of value in the marxist sense - they can help circulate value, and can capture a share of value produced elsewhere, but are not productive of value in and off themselves (hence why an economy based increasingly on financialisation will eventually come unstuck quicker than ones that are less so)

but more widely, capital isn't a thing - it's a process and a social relation

 

[camouflage]

Because that's NOT how he makes his living, he makes a very modest living giving seminars on how to trade. ie he talks the talk but doesn't walk the walk. He deliberately mouthed off to self-promote.

Yes but even if that's the case he's not actually said something that isn't basically true. Certain people are making a lot of money on the recession, those that know how anyway. And Goldman Sachs et al does basically pwn the world right now. Savings are under threat, and things will probably get worse before they get better. I don't get the rage at someone pointing out the blatantly obvious.

Hating a messenger is all very well but what about the actual message... that you're likely to make more profit betting against the general prosperity of society than investing in it or whatever, that powerful banks know this and that bail-out plans and politicians talking their usual buckets of cack mean fuck all to the situation. This strikes me as far more worthy of note than hating at whatever random twat happened to actually say so on the BBC one sloww afternoon.

 

[Dr Jon]

Alessio Rastani was for real - why the disbelief?

Why did people find it so hard to believe that Alessio Rastani was the real deal and not a hoaxer? He’s the trader, a real one, whose brutal candour in a BBC television interview revealed the utter disregard of financial markets for the well being of the broader economy and society.

J K Galbraith wrote in his classic analysis of the Great Crash of 1929 that “The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.”

Vermin.

 

[A Dashing Blade]

Alessio Rastani was for real - why the disbelief?

To paraphrase a comment on zero-hedge . . .
He's just a guy with an opinion, who happens to fancy himself a trader It is a self-claimed title. It is the equivalent of the average Urbanite taking the stage on BBC and rattling off a few personal opinions. It carries zero weight. The only difference between him and posters on Urban is that this guy is trying to elicit investors for his "system".

 

[not-bono-ever]

if his system worked, then he would not be touting it to the masses - he would be in barbados lighting his cigars with £50 notes

 

[Barking_Mad]

So what's the concensus? Will the powers that be sort this out or are they just kicking the can further down he road?