Category Archives: Current Events

America’s Cold Civil War.

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Note: The following has been determined to be a diatribe and not a screed. A screed would be several times longer.

This period in US history contains enough meat on the bone to keep both scholars and crackpots gnawing for decades. Collectively, we are in the overlap space of a sociological Venn diagram. The overlapping domains of economic calamity, political paranoia, shrinking international stature, and withering military expense combine like cyan, magenta, and yellow to form a white hot zone of malcontent.

It is no overstatement to say that many if not most Americans have chosen a part of the political pool they want to swim in. Listen to the voices at McCain/Palin rallys. Listen to people being interviewed upon leaving a McCain/Palin rally. They’re invariably angry and fearful. They distrust the “Liberal Media”. Do they mean to include Rupert Murdoch’s media empire? Do they also include most of the AM band talk radio programs? Is this the deep end of the pool or the shallow end?

I cannot help but conclude that conservatives are a fearful bunch. Study the McCain/Palin campaign advertising. Go back to any recent presidential campaign and recall Willie Horton or the Swift Boat attack on the democrats. Fear is the unifying ingredient in conservatism and the people who run the GOP machine know how to swing this stick.  Democrats do the Fear theme poorly and as a result, cannot summon the same kind of existential panic that the GOP can pull from their bag of tricks.

McCain is starting to see some of the visceral response to the possibility of Obama as president from underneath all of the rocks and behind all of the tarpaper shacks in the political back-40 acres. He has been openly challenged by angry citizens about the viability of his campaign.

That cartoon figurehead of the GOP, Rush Limbaugh, was practically apoplectic in his frustration with McCain. Strangely, this political freakshow impressario is now towing the line on McCain and has focused his leagions of ditto-zombies on bringing down the reputation of Obama with a mezmerising whisper campaign of slander.

I’m beginning to think that McCain wouldn’t be the worst kind of GOP president to have, especially if the conservatives of the land are this uncertain of him. But Palin as runner-up to the Whitehouse leaves me speechless. A country so brain-addled as to put Palin in national office is perhaps a country that needs to have its nose rubbed in it for a taste of its own collective stupidity. McCain/Palin in Washington may be what it takes for the complete implosion of the GOP.

Having watched the rise of Bush II and the conduct of the 2008 campaign, I have begun to understand what it might have been like to have lived in the period leading up to the American Civil War. This was a period intense division between citizens regarding deeply held beliefs. Civil and religous laws were invoked by both sides to justify their actions. Both Lee and Sherman believed that they marched in righteousness. It was brother fighting brother with a kind of hostility that is startling to people even today.

I sense a widespread and internal hostility along with a rigid adherence to doctrine that marks a divided country. I believe that America is in a type of cold civil war. There is a fulmination of anger and frustration out there that is beginning to partition the meaning of America into distinct translations that suit the adherents. 

Countries that experience economic and political upset are prone to the surfacing of latent fascism. Fascism is a kind of fever that spreads through the vectors of blame and jingoism. Anti-intellectualism and ethnic hatred are common manifestations of a country having a bout of fascism fever.

Witness the accusations of “elitism”  and the whisper campaign questioning the citizenship and religious affiliation of Obama. We have elite military forces, elite police forces, and elite athletes- why not elite chief executives? Why would we demand that politicians be just like the down-home folks like you see, say, running the Tilt-O-Whirl at the carnival? Don’t we want the chief executive to be someone who has honed his skills for public life? The Army has its War College. Why can’t the executive branch have its Administration school?

I think we have a civil cold war brewing in the USA right now and if 20-25 % of the workforce loses its paycheck because of the banking fiasco, I think there’ll be trouble. But no doubt, the DHS has thought of this and has soldiers and Darkwater contractors ready to deal with the sh**storm.

The Hapless Mr. Bush, Prince of the Whig Party.

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The rhyme of history is ringing in my ears. An obscure, slender figure (sans stove pipe hat) has arrived from Illinois amidst the shattered remains of the Whig party.  Alright, that’s an exaggeration.

Our do-nothing, know-nothing warrier prince is nowhere to be seen. The Republican Paradigm, under the leadership of its very own cartoon character- Dubya- has had the misfortune of leaving its greasy fingerprints all over the collapsing financial system. And it’s not just politicians who have left their grubby smudges all over the shards of Grandma’s bone china. It includes the rank & file junior plutocrat-wannabe’s and MBA greedheads under the cloak of the GOP who have gamed the system with zero regard for its stability.

The great benefit of Laissez Faire as a moral philosophy is that one is excused from moral culpability. Nobody expects you to behave honorably because morality is orthogonal to the market. There is no overlap. You are expected to be self-centered and greed is just the normal operating condition. It’s all good, baby.

Mr Bush has not stepped forward to offer advice or reassurance to the citizenry. Bush is brave when he can order the Army to march in somewhere. But if the problem involves math, lookout.   And where is Mr Rove, Bush’s brain? I suppose he is absent because he is a specialist in election, not governance. He just delivers these disasters to the Whitehouse. He evidently holds little or no indemnity for his work.

Instead, this ideological weasel, this scoundrel-in-chief, is hunkered down out of sight during the election so as to avoid contaminating McCain/Palin with the foetid stink of GOP incompetence.

The framers of the constitution apparently never anticipated that the republic could be run aground by a frat-boy imbecile egged on by a pack of greedy, morally vacuous, shady characters from the military-industrial-finance-fundamentalist “sector”. 

The US constitution needs a provision for mid-term ejection of incompetent fools.

LoC Readers Predict 2008 Nobel Prize in Chemistry!

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Two reader/commenters who contribute sage commentary to this blog have predicted the 2008 Nobel Prize in Chemistry– Jordan and Hap. Both predicted that Roger Tsien should or would win. Well done!

Naturally, Th’ Gaussling allowed his clairvoyance to be fogged over by sappy sentimentality for the (n+1)th time. My hat is off to these two savants and their predictve powers.

Oh yes, congratulations are in order for the 3 prize winners as well- Osamu Shimomura, Martin Chalfie, and Roger Tsien. Golly, we can’t forget them.

US Mint Suspends Sales of Gold Coins

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Reports have been circulating that the US Mint has suspended the sales of gold coins. The mint has been experiencing unprecedented demand for gold and silver coins. A short list of favored dealers has been drawn up for distribution of the limited supply.

What is curious about this is that the US Mint has “suspended” sales rather than simply announcing that it has a backlog. Only the govenrment would respond to demand in this way. I understand that minting gold coins is not nearly as automated and fast as base metal coins. But by their manner of responding to the demand, they can only accelerate the rise in price for these coins.

I have captured a snapshot of PGM pricing from the BASF EIB website. I hope BASF isn’t too hacked off.

The Canadian Maple and South African Krugerrand gold coins are available, as far as I can tell from internet sources.

Of interest to the catalyst world is the falling price of Palladium. The chart below is scaled to show the price of bullion for the last 12 months. This is surely a kind of economic indicator affording a clue as to the vitality of some particular and narrow market sector.

I wonder where the opportunities are in this difficult time? Now is a good time to keep your head on a swivel for unique opportunity.

Lets All take a Deep Breath and Stop the Hyper-Analysis

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Could it be that we Americans are over reacting to the problems in the market? The market is very much a collaborative structure resting heavily on trust in the power of the vast American economic engine. What we are witnessing right now is the multichannel, speed-of-light, propagation of panic through the miracle of electronic communication. Wagging tongues and chin music from our esteemed news commentators as well as we, the blogging community, are only fanning the fire of panic. The USA is on the verge of freaking itself into an economic collapse.

We don’t need additional and more concise descriptions of the foolishness of the players. That’s been done. I participated in this too. Ascerbic wit and biting rhetoric needs to be turned to constructive service. The first thing that we can do as bloggers citizens is to tone down the negative buzz and quit getting each other twittered. It serves no purpose and is counter-productive.

Citizens need to start asking constructive questions and make suggestions to all who will listen on how best to minimize panic and the damage it will cause to our economy. We need to take some time from blogging to focus on communicating with our friends and colleagues and members of congress to keep a steady hand in the coming months.

We also need to start asking about the details of the financial mess. Of the “bad mortgages” we hear about, how many are actually in default vs how many are just in the category of subprime? Are the banks possibly exaggerating the size of the losses? If banks are over extended in their loans, what fraction of their subprime loans are still in good graces? In other words, exactly how is the bad debt manifested? What is the true magnitude of the thing? How many mechanisms are available to bring this thing to a survivable landing?

It is not unheard of for a company to write off as much loss as it can if it is inevitable that it must report losses. An MBA friend pointed this out to me. He worked for a semiconductor firm whose habit was to maximize the losses if it could not avoid reporting a loss. They’d throw some of the ugly furniture overboard with the trash to clean house. To what extent is this happening now?

Maybe we can raise the bar a bit by helping to ask better questions. The best questions get the best answers.

Ike and Gus

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Hurricanes Ike and Gustav have disrupted the ebb and flow of hydrocarbons out of the US gulf coast. Lots of plant shut downs and supply chain interruptions for those in the petrochemical supply chain. It really plays havoc with just-in-time delivery of raw materials. The jabbering masses whining about gasoline prices are insulated from the real magnitude of what a hurricane and a banking catastrophy can do to their supply of hydrocarbyl necessities.  It’s like the food web, only you can’t eat it. It’s the petroleum web of commerce.

The banking fiasco is unlikely to directly harm the chemical industry other than spot problems due to the unavailability of cash to borrow for big projects. The bigger problem for the chemical industry lies on the demand side. If money isn’t available for consumers to borrow to energize the construction, automotive, machinery, and durable goods industries, the polymers and coatings supply chain will see a slow down. This will affect the specialty value-added companies as well as basic feedstock suppliers.

Pharma could be hurt if there is a big uptick in people who lose their insurance benefits to pay for the expensive namebrand pills. On the other hand, the generic drug business could gain from the slow down, based on the assumption that people will still demand drugs from someone.

In the end, the Wal-Mart to China cash conveyer will do just fine as shoppers downrate their expectations for the good life. So, what are lipstick sales looking like?

Views on the Subprime Mortgage Mess

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I have no real expertise in banking or real estate. Neither fields hold much interest for me. But I am interested in failure behaviour of large complex systems. There are a few posts out there that hold better than average insights on the current financial mess and I wanted to post links to them.

Jim Kunstler‘s blog, the full name of which is a bit too coarse to post here. None-the-less, Kunstler writes one of the best blogs out there on business topics.

Georgetown Law Faculty Blog has posted part of an article intended for the banking community. It is lifted from the American Banker which, sadly for me, requires a subscription. The theme supports my contention that business- banking included- should be treated as part of contemporary anthropology rather than an abstract exercise in arithmetic.

Business isn’t just an math exercise. There is a lot of anthropology to it. Unfortunately, anthropology isn’t on the curriculum of most MBA programs.  MBA’s worry me. They seem to be hustling the rest of us into an Orwellian future with methodologies taught by faculty members who are more interested in tidy formalisms than people. 

There are a lot of cocky bastards in business who are always certain, but frequently wrong. This banking mess is an example of what happens when they achieve a quorum. In fact, I think they have ascended to the level of mythical archetype.

Bush II and His Faith-Based Bailout

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Where is the Decider President? He sent his creepy surrogate, Dick “Rasputin” Cheney, slinking around to urge members of congress to support the bailout plan, but where is George?.  I suppose Bush II is lying low to avoid casting the long shadow of the GOP on this banking train wreck.

But it’s just so striking; in the run up to the largest business bailout in the history of the solar system, Secretary Paulson’s boss is strangely absent. No frank and heartfelt talk with the American people. All the Bush administration can do is to attempt to hustle congress into a mysterious plan. Take our plan on faith- we know what we are doing.

No details have been released to the citizens regarding how this number, $0.7 trillion, was arrived at. Is this large sum actually large enough? How does the country recoup this outlay?  Is the stated urgency related to the election?

Citizens must learn to save more cash and be smarter about the terms of the mortgage they sign. We must consider that our banking system is much like the municipal water system- it’s integrity must be scrupulously maintained and those who manage it must be held accountable for its operation.

Update:  Bush II will make an announcement to the nation this evening. I wonder if there will be any folksy anecdotes?

Drill Baby Drill!! The GOP Call to Arms.

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I recall sitting on the sofa watching the 2008 GOP convention and hearing the intoxicating refrain “Drill Baby Drill”. It was like the sensation of sitting in the dentist chair with my brainstem bathed in cool nitrous oxide vapors and face numbed with lidocaine.  I found myself tumbling head over heals in a mild, drooling, narco-twilight state while my twitching eyeballs attempted to focus on McCain.  My fellow citizens had drummed themselves into an enchanted war dance and gathered to hear Colonel Kurtz, but without the banana leaves.

Then I snapped out of it.  Drill baby drill. This was not just a work order or a requisition for drilling staff to please set up a few drilling rigs in the morning. This was an exhortation to rip those smirking tree huggers from their stations, pulp the trees to make a paper dunce cap for Pelosi, and call in the Air Force to oversee saturation drilling of the continental shelves, and do it pronto!

“Drill baby drill ” was a catch phrase along the lines of “Damn the torpedoes! ” or “somebody get a rope! ” Its conception and use was a masterful bit of applied propaganda- A figurative running of the liberals out of town on a rail.

But what was lost in the excitement were the pragmatics of oil production. You need to boost refinery capacity to increase the supply of refined fuels.  And, what oil company is going to attempt to flood the market in a bid to drive down oil prices? What oil company is going to step in and provide cheaper crude to US refiners so that they can, dutifully, distribute cheaper gasoline when the global market price is so high? Only the dumb ones. Do they think that Santa Claus runs Exxon?

I thought GOP’ers were market savvy, laissez faire devotees swingin’ the big stick of Ronnie Reagan tough love? What has happened to these people?

Seems to me that oil in the ground is like money in the bank. Why are we so anxious to deplete North America of its supply??  What about pulling back on demand to counter the high prices? That is the one big stick that consumers have in the market.