Olsen said:
There’s a transcript of an interesting panel discussion about the current situation on the Australian ABC website (link below).
Panel weighs up latest market movements
Date : 19/08/2007
Reporter: Alan Kohler
http://www.abc.net.au/insidebusiness/content/2007/s2008958.htm
Gerard Minack, Chief Strategist at Morgan Stanley had this to say:
[...] We've got to recognise that over the last four years, lenders gave subprime borrowers a trillion dollars to spend. And they spent it. They bought new homes, they bought established homes, they bought cars, they bought flat-screen TVs. They ain't going to get another trillion dollars over the next four years and that's a huge knock to US growth [...]
More to come, indeed ....
Olsen
Well-known
The norwegian national soccer team have just beaten Argentina 2 - 1 at Ullevål Stadion, Oslo tonight. So, the norwegian ego & arogance prevents any warnings of a financial crisis going in. But a few long and high shots from argentinian legends like Lionel Messi and Maxi Rodrigues, - who scored for Argentina, brought sighs of shock and admiration from the norwegian crowd. - It was just a private match. With more at stake I wonder if the norwegian team would have pulled it home.
John Camp
Well-known
A few random points:
Some people claim that exporting cheap grain to Africa and other places destroyed local agriculture -- there is no way for relatively inefficient local farmers to compete with cheap grain. Africa once pretty mcuh was food self-sufficient; most of the 20th-21st century famines were produced deliberately.
-The growth of ethanol in the US does not increase agricultural subsidies, it decreases them. The subsidies kick in when grain prices fall below a key level, and the climbing price of corn lifts all grain prices. "Factory farming" exists because it is more efficient that other forms, using less oil and labor.
-Ethanol is not just used to stretch the oil supply, but as a critical additive to achieve other anti-pollution goals.
-Neither the US or any other developed economy can get along without cars. At the same time, it is apparent that the oil eventually will run out -- and there are certainly better uses for oil than to simply burn in cars, something I believe that people in the future will consider insane. The solution is probably the electric car, run off a grid supplied largely by nuclear power, and supplemented by oil from coal, mixed with biofuels. At the present state of technology, Toyota could build a plug-rechargeable Camry that would average 100 miles per gallon for the typical LA commuter at typical LA freeway speeds. (Batteries could drive a car 40-60 miles before the internal combustion engine would have to kick in. If the car could be plugged in both at home and at work, the MPG would be even better.)
JC
Some people claim that exporting cheap grain to Africa and other places destroyed local agriculture -- there is no way for relatively inefficient local farmers to compete with cheap grain. Africa once pretty mcuh was food self-sufficient; most of the 20th-21st century famines were produced deliberately.
-The growth of ethanol in the US does not increase agricultural subsidies, it decreases them. The subsidies kick in when grain prices fall below a key level, and the climbing price of corn lifts all grain prices. "Factory farming" exists because it is more efficient that other forms, using less oil and labor.
-Ethanol is not just used to stretch the oil supply, but as a critical additive to achieve other anti-pollution goals.
-Neither the US or any other developed economy can get along without cars. At the same time, it is apparent that the oil eventually will run out -- and there are certainly better uses for oil than to simply burn in cars, something I believe that people in the future will consider insane. The solution is probably the electric car, run off a grid supplied largely by nuclear power, and supplemented by oil from coal, mixed with biofuels. At the present state of technology, Toyota could build a plug-rechargeable Camry that would average 100 miles per gallon for the typical LA commuter at typical LA freeway speeds. (Batteries could drive a car 40-60 miles before the internal combustion engine would have to kick in. If the car could be plugged in both at home and at work, the MPG would be even better.)
JC
kevin m
Veteran
There is so much sheer vanity and waste tied up in private car use it's not funny. Many Americans have convinced themselves that they 'need' a three-ton, 12mpg SUV to take the kids to school. If we can't learn to tell the difference between "need" and "want" we'll be learning to get along without them soon enough. Of course that would mean the utter collapse of our economy, but we wouldn't be the first people on earth foolish enough to consume our way to our own doom.
rxmd
May contain traces of nut
I seem to recall that Amartya Sen won the Nobel prize in economics for showing that 20th century famines were typically not caused by limited food availability, but by distribution problems.John Camp said:
It's well known that development aid actually creates some of the developmental problems it aims to solve. Food aid is a major culprit here because it floods local markets with cheap food (which the donor government typically bought from its own farmers' surplus, making food aid another type of food subsidy) and kills the economic basis for local food farming. Developmental aid also creates all sorts of distribution problems, including government corruption, forced inefficient usage of limited money to hire expensive Western consultants (making development aid a kind of prop for the domestic white-collar labour market in Western countries) and to NGOs making badly-informed, agenda-driven top-down decisions who needs what (as opposed to people organising themselves). It's no wonder that development aid is increasingly getting under fire. If the West wants to help Third World countries, it should open its food markets to Third World products in spite of supporting its own economy by shipping its own subsidized agricultural surplus to the Third World; the fact that it does not do so shows, I think, that the actual development of the Third World is a tertiary goal at best.
I'm not sure how far that is true. Your argument is basically that having a known-inefficient, subsidized industry decreases total subsidy spending, because increasing demand and rising prices will lead to a decrease of subsidies for related industries. Since subsidies exist to boost the supply side and to prevent rising prices in the first place, I'm not sure if that actually works. One would have to look at the real-world figures.John Camp said:
Philipp
If America was in any way serious about cutting back pollution, the FIRST thing they should be doing is improving the fuel efficiency of the car fleet. What they should NOT be doing is converting food into fuel. Europe is way ahead of America in this regard. Heck even China is ahead of America!John Camp said:
U.S. vehicles rank bottom in world fuel efficiency (link)
U.S. fuel-efficiency requirements for passenger cars have been stuck at 27.5 miles per gallon since 1985, while the standard for pickups, minivans and other light trucks will increase from 20.7 mpg in 2004 to 24 mpg in 2011.
That puts the United States behind Canada, South Korea, Australia, China, Europe Union and Japan in vehicle fuel economy, according to the report from the International Council on Clean Transportation. A copy of the report was obtained by Reuters.
China enacts first fuel-efficiency standards (link)
Though not particularly stringent, the new requirements are stricter than U.S. standards, which haven't been updated for more than 20 years, Yang noted.
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John Camp
Well-known
rxmd said:
That's not my argument; in fact, I don't have an argument. It's an existing situation, not a theory. The government sets a support price level for various grains. If the free-market price is higher than the support price, you take the free-market price. If it's lower, you get the support price. The idea is that the US does not want to leave itself open to food-price manipulation (or availability) by possibly hostile countries; and it keeps farmers in business in bad times. Recently, because of the boom in ethanol, the price of corn has been well above the support price, so no subsidies are paid. In fact, corn now costs so much that farmers are shifting acreage normally devoted to other grains, like soybeans, to corn. That drops the soybean supply, so the cost of beans also goes up. As this is happening, the acreage devoted to grain also increases, and more marginal land is pushed into production. The downside here is that should there suddenly be a drop in ethanol use, we'd have an ocean of grain coming in, the price would plummet, and the subsidies would again kick in. That could happen. But, if prices stay high, subsidies disappear. It's a toggle off-on situation.
The US is the greediest gas user. You can tell by looking at stats, or simply by looking at all the empty 6-liter pickup trucks that you see driving around. My preference, though, is not to ban pickup trucks, because there's no fair way to distinguish between people who really need them, and people who don't; my solution would be to kick up the gas tax until it reaches European levels (~$5 a gallon, from the present ~$3.) That would preserve freedom of choice, but you'd have to pay heavily for a bad choice. The problem with this is that most US residents realize that the government would just piss the money away -- you'd have a big tax increase with nothing to show for it. It would be more attractive if 100% of the tax were put into a fund that would be used to reduce the Social Security or other payroll taxes. That would also provide most of the benefit to middle class and lower income workers.
I know!!! Why not just drastically increase fuel efficiency requirements on all new vehicles sold to the current European/Japanese levels.John Camp said:
The technology is available NOW and is already being used in most other countries. The savings made on fuel would have a far greater impact on cutting back pollution than any impact ethanol would have.
Oh wait, I know why that's not going to happen .... the automotive lobby pays off the politicians
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retow
Well-known
As far as cars are concerned, I agree with most of what has been said. However, oversized-/weight cars and terribly inefficient engines and transmissions of US cars (most gas guzzlers still have three or four gears only) are only part of a bigger problem.
Poor construction and insulation of homes on the one hand and permanently running air condition to heat or cool on the other hand is a huge issue as well. Office buildings whith locked windows requiring air conditions to run permanently adds another meaningless waste of energy and source of pollution.
As far as CAR and BUILDING technologies are concerned Europe seems to be decades ahead of the US.
Poor construction and insulation of homes on the one hand and permanently running air condition to heat or cool on the other hand is a huge issue as well. Office buildings whith locked windows requiring air conditions to run permanently adds another meaningless waste of energy and source of pollution.
As far as CAR and BUILDING technologies are concerned Europe seems to be decades ahead of the US.
alcaraban
Established
retow said:
Here (Spain) we had a very energy-saving traditional architecture (probably the same applies to almost every country), but the building enterprises (as there is no regulation in this area) prefer to build the same way (and with the same materials) from Andalousie to Basque Country, so they make houses that later will need every kind of air conditioning. Somewhat related to that, five years ago solar energy production in Spain was almost missing (less MWh than Germany or Austria).