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marmar

Profile Information

Gender: Male
Hometown: Detroit, Michigan
Home country: Citizen of the world whose address is in the U.S.
Current location: Detroit, Michigan
Member since: Fri Oct 29, 2004, 12:18 AM
Number of posts: 66,487

Journal Archives

The Drought Isn’t California’s Only Water Problem


(Wired) WHETHER YOU LIVE in or out of California, you are probably looking for something, anything, just one dang thing that will help you understand this impossibly complicated drought.

You’re not going to find it. No Central Valley almond, Los Angeles swimming pool, Palm Springs golf course, Fresno lawn, Nestle water bottle, Napa wine, Humboldt pot farm, or Merced River salmon is going to satisfy your craving for a culprit. Instead, allow me to divert your attention to the Sacramento-San Joaquin River Delta, a massive estuary to the east of the San Francisco Bay that is the heart of a story that will at least explain why you’ll never get a satisfying explanation.

Actually, it’s not about the Delta, exactly; the real story is 200 feet below it, where the governor of the Golden State wants to dig huge tunnels that will make it easier for southern California to get northern California’s water.

Officially known as Conservation Measure 1 of the Bay Delta Conservation Plan—but commonly known as the Delta Tunnels—the idea is to dig two 35-mile tunnels, each 40 feet in diameter and capable of pumping 67,000 gallons of water per second from the Sacramento River to the California Aqueduct. The tunnels are supposed to fix the plumbing that delivers water to two-thirds of the state: every coastal city from San Francisco to San Diego, and millions of farms along the way. The plan is controversial, and has been in talks for a decade. If approved, the tunnels would take about ten years and an estimated $25 billion dollars to build. ................(more)

http://www.wired.com/2015/04/drought-isnt-californias-water-problem/




"A Corporate Trojan Horse": Critics Decry Secretive TPP Trade Deal as a Threat to Democracy





Published on Apr 16, 2015
http://democracynow.org - Senate Finance Committee leaders Republican Orrin Hatch and Democrat Ron Wyden are expected to introduce a "fast-track" trade promotion authority bill as early as this week that would give the president authority to negotiate the secretive Trans-Pacific Partnership trade deal and then present it to Congress for a yes-or-no vote, with no amendments allowed. On Wednesday, more than 1,000 labor union members rallied on Capitol Hill to call on Democrats to oppose "fast-track" authority. We speak with two people closely following the proposed legislation: Lori Wallach, director of Public Citizen’s Global Trade Watch, and Rep. Alan Grayson, a Democrat from Florida.



Welfare Queen (cartoon)





http://www.truthdig.com/cartoon/item/welfare_queen_20150417



California Plagued by Dry Wells as Drought Makes Water Elusive


(Bloomberg) Near California’s Success Lake, more than 1,000 water wells have failed. Farmers are spending $750,000 to drill 1,800 feet down to keep fields from going fallow. Makeshift showers have sprouted near the church parking lot.

“The conditions are like a third-world country,” said Andrew Lockman, a manager at the Office of Emergency Services in Tulare County, in the heart of the state’s agricultural Central Valley about 175 miles (282 kilometers) north of Los Angeles.

As California enters the fourth year of a record drought, its residents and $43 billion agriculture industry have drawn groundwater so low that it’s beyond the reach of existing wells. That’s left thousands with dry taps and pushed farmers to dig deeper as Governor Jerry Brown, a 77-year-old Democrat, orders the first mandatory water rationing in state history.

“The demand we’re placing on the aquifer and the deep bedrock drilling, which is going on at an alarmingly fast pace, is really scary,” said Tricia Blattler, executive director of the Tulare County Farm Bureau. “Folks are really concerned we’re not going to be able find water in the groundwater system much longer. We are tapping it way too quickly.” ...................(more)

http://www.bloomberg.com/news/articles/2015-04-17/california-plagued-by-dry-wells-as-drought-makes-water-elusive




Biggest Credit Bubble in History Flashes Warning – ‘Seek Cover’


By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Testosterone Pit.


Hidden in the IMF’s just released 188-page Global Financial and Stability Report is a doozie of a chart that screams not only “credit bubble” but also flashes a red warning sign: “seek cover, implosion in sight.” It depicts US issuance of covenant-lite loans and second-lien loans since 2001, including their phenomenal bubble that so spectacularly collapsed in 2008, and the even greater bubble currently underway – with an equally spectacular future.

Covenant-lite loans, which eliminate many of the protections that lenders normally require, allow over-leveraged junk-rated companies to pile on even more debt when they would normally no longer be able to do so. A key benefit for the Private Equity firms that own them: PE firms make a big part of their profit by having their portfolio companies borrow money, but not for expansion purposes or other productive uses. Instead, PE firms suck that cash out the back door through special dividends, fees, and other devices. When the portfolio company pops, the PE firm conveniently has the cash, and the lenders eat the loss.

To protect themselves, lenders normally force borrowers into covenants that prevent these and other shenanigans. But not anymore. Lenders, driven to near insanity by the Fed’s interest rate repression, are caught up in an all-out chase for yield and don’t look at anything else, and to get that minuscule extra yield, they take on risks, any risks, no questions asked, and to heck with future losses, and they hold their noses and close their eyes and pick up the worst crap, and then find ways of stuffing those risks into your mutual fund.

It’s a Feeding Frenzy Out There.

The longer it goes on, and the more of this reeking debt with a high probability of default is piling up on the books of banks and other lenders, the more damaging the implosion will be. And so covenant-lite debt has become a flashing red light of a credit bubble in its final throes. A record $238 billion were issued in 2013, according to Thomson Reuters. Over 50% of the market, another hair-raising record. ...............(more)

http://www.nakedcapitalism.com/2014/04/wolf-richter-biggest-credit-bubble-in-history.html




"A Corporate Trojan Horse": Critics Decry Secretive TPP Trade Deal as a Threat to Democracy





Published on Apr 16, 2015
http://democracynow.org - Senate Finance Committee leaders Republican Orrin Hatch and Democrat Ron Wyden are expected to introduce a "fast-track" trade promotion authority bill as early as this week that would give the president authority to negotiate the secretive Trans-Pacific Partnership trade deal and then present it to Congress for a yes-or-no vote, with no amendments allowed. On Wednesday, more than 1,000 labor union members rallied on Capitol Hill to call on Democrats to oppose "fast-track" authority. We speak with two people closely following the proposed legislation: Lori Wallach, director of Public Citizen’s Global Trade Watch, and Rep. Alan Grayson, a Democrat from Florida.


Professor Richard Wolff: Global Capitalism: April 2015 Monthly Update





1. Basic Economic Changes: From Anti-austerity to Anti-capitalism

2. Social Polarization: From “we are all middle class” to “1% versus 99%”

3. Changing “higher education” into “job training” – why, how and for whose gain?



Biggest Credit Bubble in History Flashes Warning – ‘Seek Cover’


By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Testosterone Pit.


Hidden in the IMF’s just released 188-page Global Financial and Stability Report is a doozie of a chart that screams not only “credit bubble” but also flashes a red warning sign: “seek cover, implosion in sight.” It depicts US issuance of covenant-lite loans and second-lien loans since 2001, including their phenomenal bubble that so spectacularly collapsed in 2008, and the even greater bubble currently underway – with an equally spectacular future.

Covenant-lite loans, which eliminate many of the protections that lenders normally require, allow over-leveraged junk-rated companies to pile on even more debt when they would normally no longer be able to do so. A key benefit for the Private Equity firms that own them: PE firms make a big part of their profit by having their portfolio companies borrow money, but not for expansion purposes or other productive uses. Instead, PE firms suck that cash out the back door through special dividends, fees, and other devices. When the portfolio company pops, the PE firm conveniently has the cash, and the lenders eat the loss.

To protect themselves, lenders normally force borrowers into covenants that prevent these and other shenanigans. But not anymore. Lenders, driven to near insanity by the Fed’s interest rate repression, are caught up in an all-out chase for yield and don’t look at anything else, and to get that minuscule extra yield, they take on risks, any risks, no questions asked, and to heck with future losses, and they hold their noses and close their eyes and pick up the worst crap, and then find ways of stuffing those risks into your mutual fund.

It’s a Feeding Frenzy Out There.

The longer it goes on, and the more of this reeking debt with a high probability of default is piling up on the books of banks and other lenders, the more damaging the implosion will be. And so covenant-lite debt has become a flashing red light of a credit bubble in its final throes. A record $238 billion were issued in 2013, according to Thomson Reuters. Over 50% of the market, another hair-raising record. ...............(more)

http://www.nakedcapitalism.com/2014/04/wolf-richter-biggest-credit-bubble-in-history.html




Australia Runs out of Luck, Now Needs a Miracle


By Lindsay David, Australia, author of Print: The Central Bankers Bubble, founder of LF Economics. Originally published at Wolf Street.


Australia, you have officially run out of luck.

While leveraged property investors in Sydney and Melbourne are desperately hunting for a senseless “net-yield” that makes the yield on a German 2-year bund look rewarding, the Australian mining sector is screaming towards what may be one of the greatest and colossal economic breakdowns in modern Western history.

As iron ore illustrates, this is not a downturn; this is a spectacular crash in the spot price of a commodity. And the sad news is, there is no new demand scenarios (unless China builds more apartments than its population) to suggest that more supply is needed to fulfil the demand of the global economy.

Australia made two bets.

The first bet was that China would willingly consume every ounce of iron ore Australian miners could dig from the ground and pay a premium.

Unfortunately, Australia has built an (incredibly sophisticated and streamlined) iron ore production operation so big that the world may never be able to consume all that it can supply. Our treasury, RBA, Miners and politicians assumed that China would forever grow. But they failed to calculate over the long-term that if China continues to consume all the iron ore dug from Australia’s underground, the world’s most populous nation would literally need to build a national subway network, literally an airport every 22 kilometres apart from each other and literally more dwellings than people. .................(more)

http://www.nakedcapitalism.com/2015/04/wolf-richter-australia-runs-luck-now-needs-miracle.html




Bill Black: How the “Super Crunchers” Became the “Super Torturers” of Finance Data


By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives


Some books have spectacularly bad timing, like Moral Markets: The Critical Role of Values in the Economy, which was published in 2008 as a celebration of market and their nourishment of high ethical values. The book has many interesting chapters and I recommend it, but even lifelong market apologists now refer to the “corrupt culture of banking.” Ian Ayres, a brilliant professor of law and economics at Yale, published his book Super Crunchers: Why Thinking-By-Numbers is the New Way To Be Smart to critical acclaim on August 28, 2007. Ayres’ book is an ode to how much better decision-making becomes when it is made empirically on the basis of very large data rather than through human judgment. There is a great deal of support in the literature for that thesis, and the result is one of the reasons why behavioral economics has become increasingly dominant. The general idea is that humans bring significant, unexamined biases to our decisions and that systems that rigorously examine the data are superior because they avoid these biases. That general idea continues to have considerable support and I have no personal problem with the general idea.

I write, however, to raise several cautions that arise from the disastrous performance of the Super Crunchers in finance during the financial crisis. Finance quants purported to be the best Super Crunchers in any commercial context. We are examining therefore a series of hundreds of catastrophic failures at our most elite financial institutions by those who claimed to be the best Super Crunchers in existence. (Physicists and the NSA’s top Super Crunchers always considered these claims to be laughable, but I will let them express that view.)

This article was prompted by reading a January 1, 2009 article entitled: “Irrational Expectations: How statistical thinking can lead us to better decisions” by “Deloitte University Press.” Deloitte, of course, is “talking its book,” trying to sell its consultants as Super Crunchers, but the article is lively and worth reading. The authors rightly consider the neoclassical model of decision-making a farce.

If you look at economics textbooks, you will learn that homo economicus can think like Albert Einstein, store as much memory as IBM’s Big Blue, and exercise the willpower of Mahatma Gandhi. Really. But the folks that we know are not like that. Real people have trouble with long division if they don’t have a calculator, sometimes forget their spouse’s birthday, and have a hangover on New Year’s Day. They are not homo economicus; they are homo sapiens.


Because they are, ultimately, quants incentivized to be sales guys, they oversell their quant products.

“But unlike a human decision-maker, a predictive model has the ability to optimally combine these and many other factors to efficiently estimate the employee’s relative likelihood of leaving. And unlike the human decision-maker, the predictive model will arrive at the same answer before and after lunch, takes virtually no time to draw conclusions, and is not affected by prejudices, pre-conceived ideas or cognitive biases. In short, predictive models can help us better approximate the ideally rational homo economicus.”


Here, two of the authors in Moral Markets could have helped protect the Deloitte authors from error. The ringing phrase in Moral Markets is that “homo economicus is a sociopath.” The Deloitte authors are businessmen who sell to other businessmen (and a very few women). They apparently think that homo economicus is superior to a human – “ideally rational” and not “affected by prejudices” – or love, empathy, mercy, justice, or Tikkun Olam, but they are in fact describing a sociopath. ..............(more)

http://www.nakedcapitalism.com/2015/04/bill-black-super-crunchers-became-super-torturers-finance-data.html




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