Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
A tempting proposition
ilargi, the automatic earth
47 economists in a Wall Street Journal survey, and 53 in a Bloomberg one, say the recovery is here and the recession is over. That would add up to a nice even 100, but I’m afraid many might be the same. When reading through the two articles about the surveys, I find it -literally- hard to see what the optimism is based on. There is talk of confidence indices, the Obama stimulus gets mentioned, as does a Fed $1.45 trillion mortgage debt purchase. The consensus expectation is for unemployment to stay below 10%, but there’s no reason(ing) provided for that.
The closest thing to a concrete fact I can find in either piece is the “better-than-expected employment report for July, where employers cut 247,000 jobs and the jobless rate fell for the first time in 15 months”. And yes, that does sound nice, but those numbers cover just one month, and so many if’s, but’s and maybe’s have been pointed out since they were published that they can only be a very slim foundation to base so much optimism on.
So I have to say, I don’t know why the 47+53 club expects economic growth, recovery, any of that. There may well be better formulated grounds, but in the absence of such grounds, I feel left quite cold and alone with faith-based “economics”. Of course, what I’ve left out thus far is what may well be the main reason for the hosanna feeling: the surge in stock markets. Still, I’m sure at least some of the economists would recognize that rising share prices are, all on their own, a questionable indicator for an economy that’s been mired in recession/depression for, depending on your calendar, 10 or 20 months…
(X August 2009)
There is No Recession
Mike Whitney, Counterpunch
Credit is not flowing. In fact, credit is contracting. When credit contracts in a consumer-driven economy, bad things happen. Business investment drops, unemployment soars, earnings plunge, and GDP shrinks. The Fed has spent more than a trillion dollars trying to get consumers to start borrowing again, but without success. The country’s credit engines are slowing to a crawl.
Fed chairman Ben Bernanke has increased excess reserves in the banking system by $800 billion, but lending is still slow. The banks are hoarding capital in order to deal with the losses from toxic assets, non performing loans, and a $3.5 trillion commercial real estate bubble that’s following housing into the toilet. That’s why the rate of bank failures is accelerating. 2010 will be even worse; the list is growing. It’s a bloodbath.
The standards for conventional loans have gotten tougher while the pool of qualified credit-worthy borrowers has shrunk. That means less credit flowing into the system. The shadow banking system has been hobbled by the freeze in securitization and only provides a trifling portion of the credit needed to grow the economy. Bernanke’s initiatives haven’t made a bit of difference. Credit continues to shrivel…
(10 August 2009)
The Queen’s Postbag Becomes A Battleground For Credit Crunch + Energy Debate
Leonora Oppenheim, Treehugger
A new UK consultancy group called Abundancy launched on a royal wave last week with an open letter to Her Majesty The Queen. HRH Elizabeth II no doubt receives bag loads of mail every week so why should she pay special attention to this one? Well, not only does the letter have high profile signatories such as Alain de Botton, Jonathan Porritt, Jeremy Leggett, Rob Hopkins and Jules Peck (letter’s author and co-founder of Abundancy), but the letter is actually a response to a question The Queen asked herself about the credit crunch – “Why did no one see it coming?”
A Riposte to British Academy
The letter to The Queen is not only a response to her question about the credit crunch, but is also a direct riposte to another letter sent to Her Majesty a few weeks ago by the British Academy. The Academy’s letter attempted to explain “why so few experts predicted the crunch”, but the new letter accuses the first of having a “limited horizon” and “failing to address the wider context of more serious macro issues facing mankind.” In other words the British Academy letter did not connect environmental issues and energy dependency to our current economic problems.
Palace’s Postbag Improbable Battleground
In their article last week the Financial Times described Buckingham Palace’s postbag as an “improbable battleground for a spat between rival intellectuals about the credit crunch.” The FT said the second letter “clouded the waters” and that “Defenders of the British Academy letter could argue that it answers the exact question the Queen asked, without either denying or accepting broader concerns.” We, however, believe that it is impossible to truly understand the origins of a phenomenon such as the credit crunch without exploring the wider global context…
(18 August 2009)
From the website:
To read the letter to The Queen in full visit Abundancy’s website. Abundancy has been founded by three TreeHugger favourites Jules Peck author of Citizen Renaissance, John Grant author of The Green Marketing Manifesto and Tamara Giltsoff of Live|Work and OzoLab.
