What are the potential impacts of public confidence on the economy's recovery?

[OmCheeto]

I think we should expect to see oil imports increase, especially middle eastern oil, given current policy: deep water drilling moratorium, and proposed bans or tariffs on Canadian tar sands oil.

Hudson: That's it man, game over man, game over! What the **** are we going to do now? What are we going to do?
Burke: Maybe we could build a fire, sing a couple of songs, huh? Why don't we try that?

Personally, I started investing* in MXWL & AONE in December.

*warning: I am an amateur investor
7/2/10: Maxwell Technologies Inc. Drops to 52-Week Low
7/14/10: A123 stocks down 59.41% since 1/1/10

 

[edward]

I think we should expect to see oil imports increase, especially middle eastern oil, given current policy: deep water drilling moratorium, and proposed bans or tariffs on Canadian tar sands oil.

Current policy?? Perhaps you would care to share a link on proposed Tar sands tariffs.
It would still be an imported source of oil.

Of the thousands of wells in the gulf the deep water moratorium has affected only 33 exploratory wells that I know of. And that isn't permanent.

Over 3,000 wells are still active in the gulf. That doesn't mean that they are owned by American companies. We import BP oil from the Gulf.

http://www.politicsdaily.com/2010/0...ls-court-rejects-moratorium-on-deep-sea-gulf/

 

[mheslep]

Current policy?? Perhaps you would care to share a link on proposed Tar sands tariffs.

http://blogs.forbes.com/investor/2010/07/14/liberal-california-politician-holding-oil-sands-hostage/

Henry Waxman, chairman of the House Energy and Commerce Committee, wrote lengthy letters on July 2 to Secretary of State Hilary Clinton and Elizabeth Orlando, the State Department's Keystone XL project manager, in which he vehemently opposes approval of TransCanada Corporation's application to move ahead with the construction of the Keystone XL pipeline.
...
In one swift move, Mr. Waxman has elevated the oil sands debate to a new level. It is one thing for the city of Bellingham, Washington to ban oil sands products from its municipal fleet. It's quite another for the chairman of a powerful House committee to declare war on one of Canada's most valuable resources.

It would still be an imported source of oil.

How would it get to the US?

Of the thousands of wells in the gulf the deep water moratorium has affected only 33 exploratory wells that I know of. And that isn't permanent.

Just as I don't know that the ban is permanent, you don't know that it will end up being temporary.

Over 3,000 wells are still active in the gulf. That doesn't mean that they are owned by American companies. We import BP oil from the Gulf.

Those 3,000 wells, at least the older ones don't produce like they used to. They new wells punch well above their weight in production, as we've unfortunately seen from the DeepWater well.

In addition to the deep water ban, Salazar reversed the opening of the other coastal areas for drilling. Then, I never expected the Obama administration to allow drilling outside the Gulf, and the earlier announcement was a political head fake in my view.

http://www.politicsdaily.com/2010/0...ls-court-rejects-moratorium-on-deep-sea-gulf/

Yep, and a couple days later:

Interior Secretary Ken Salazar reissued a moratorium on deepwater offshore drilling Monday, after the 5th U.S. Circuit Court of Appeals rejected the White House’s appeal of a lower court decision to halt the drilling ban.

http://www.politico.com/news/stories/0710/39612.html
I would have thought Salazar's reissue order yesterday illegal, given the earlier court order and inviting a contempt of court sanction, but I'm no lawyer.

 

[edward]

http://blogs.forbes.com/investor/2010/07/14/liberal-california-politician-holding-oil-sands-hostage/


How would it get to the US?

Here is the propsed route for the keystone pipeline.

In Canada the pipeline will extend approximately 327 miles from Hardisty, Alberta southeast through Saskatchewan before entering the United States in Morgan, Montana, where it will continue on southeast for 836 miles through South Dakota and Nebraska. In Steele City, Nebraska the pipeline will connect to the 296-mile long Keystone Pipeline before resuming in Cushing Oklahoma, where it will continue on to its final destination at existing terminals in Nederland, Texas.

http://www.earthworksaction.org/KeystoneXLpipeline.cfm

Emphasis mine. I can see where some Americans might not want a Trans USA Canadian owned Pipeline. That would lock us into importing from Canada.

Bear in mind we were talking about the economy and the cost of imports.

 

[russ_watters]

Emphasis mine. I can see where some Americans might not want a Trans USA Canadian owned Pipeline. That would lock us into importing from Canada.

Who are these people? You? Because I can't imagine why anyone would prefer importing oil from the Middle East over importing it from Canada.

 

[edward]

Who are these people? You? Because I can't imagine why anyone would prefer importing oil from the Middle East over importing it from Canada.

I misspoke. I would have to agree that importing the oil from Canada wouldn't be a problem for me. The pipeline would be a problem for a lot of people. A Canadian owned Trans America pipe line just doesn't sound right to us old geezers.

Even an American owned pipeline moving Canadian oil is going to see a lot of opposition from the tree huggers.

Most likely none of this will happen in a manner timely enough to effect the economy for many years.

 

[russ_watters]

Yes, I can certainly see nimbys and tree huggers opposing an oil pipeline - any oil pipeline - but that's not the same as an objection based on locking us into importing from Canada. You made it sound like people would object to importing oil from Canada.

 

[edward]

Yes, I can certainly see nimbys and tree huggers opposing an oil pipeline - any oil pipeline - but that's not the same as an objection based on locking us into importing from Canada. You made it sound like people would object to importing oil from Canada.

Sorry about that I should clarify. It isn't just oil from Canada it is tar sand oil that many people are opposed to. But that gets into green house gases and that is for another thread.

Major oil companies such as Shell are also coming under shareholder pressure to pull out of the Canadian projects. Earlier this year, Shell announced it was scaling back its expansion plans for the tar sands after a revolt by shareholders. Producing oil from the Alberta tar sands causes up to five times more greenhouse gas emissions than conventional crude oil, according to the campaign group Greenpeace.

http://www.guardian.co.uk/business/2010/feb/14/canada-china-investment-oil-sands

Ironically now China is showing an interest in Canada's tar sands oil.

 

[Astronuc]

Lenders may foreclose on more than 1 million homes this year http://news.yahoo.com/s/ynewspoint/20100715/ts_ynewspoint/ynewspoint_ts3125

Economic woes may force more than 1 million American households to lose their homes this year.

Nearly 528,000 homes were foreclosed in the first six months of 2010. As lenders work through a huge backlog of borrowers behind on their mortgages, even more home repossessions could occur before the end of the year.

According to RealtyTrac, Inc., a foreclosure listing service, the number of households facing foreclosure in the first half of the year climbed 8 percent when compared to the same time frame last year. In June, 1 in every 411 households received a foreclosure filing.

The fastest growing group of foreclosures involved homeowners with good credit who took out conventional fixed-rate loans. Many of these borrowers have fallen behind in their mortgages due to unemployment or reduced income.
. . . .

So much for the recovery.

 

[brainstorm]

Lenders may foreclose on more than 1 million homes this year http://news.yahoo.com/s/ynewspoint/20100715/ts_ynewspoint/ynewspoint_ts3125
So much for the recovery.

Foreclosure is a mechanism in the eventual price-adjustments that will lead to true recovery by resetting the real-estate markets. The annoying thing about them is that people's credit gets destroyed, their families get destabilized, they become cynical and lose faith in economic growth generally, etc.

Ultimately, unless people go crazy and start destroying property in some kind of war or civil unrest, the housing will still be there to move into after foreclosure. So the people getting evicted from their houses will eventually probably end up in another foreclosure (or even the same one maybe) for a lower price.

It would save a lot of hassle and headaches if government or banks generally would agree to simply start discounting mortgages across the board until foreclosures were minimized, but that would eliminate the moral hazard of buying a house on credit, which would lead people to borrow as much money as they possibly could thinking that they would eventually not have to pay it back anyway.

I suspect that such lack of moral hazard in borrowing has been around for a while, prior to the real-estate burst even - and that this general belief in the economy as a vehicle for perpetual growth that individuals could just ride like surfing a wave, was in large part responsible for the eventual crash. Responsibility and caution in borrowing and spending is what keeps inflation in check. Without it, people just jump on whatever bandwagon they think is going to appreciate the fastest and spend money like "there's always going to be more where that came from."

How are people supposed to recover from the level of entitlement and material dependency that comes from an economy like that? There may be people who suffer for the rest of their lives because they grew accustomed to levels of spending and consumption that were unsustainable to start with. The economy could completely recover to a level where they have plenty to eat and a roof over their heads and all the media access they want but they will never again feel economically satisfied because of what they were led to believe was economically achievable decades ago.

 

[edward]

The foreclosed houses aren't selling. Banks are sitting on thousands of them.

BOA bought the old CountryWide mortgage company. Along with the mortgages they got a subsidiary of CountryWide.

This subsidiary, ReconTrust, is now handling the foreclosure process on all of the CountryWide delinquent properties.

The ReconTrust website is a good barometer of what is happening. They have an easy to use website to look up properties available and properties sold in 15 states. Look at properties sold and you will see that most of them didn't sell at auction. They are still owned by the trustee.

http://www.recontrust.com/

 

[turbo]

The GOP is holding up consideration of an emergency spending bill to extend unemployment benefits. The bill is projected to cost about $30B, and since the unemployed are pretty desperate for money, most of that outlay would be rolled right back into our local economies. Jon Kyl said on Fox news last Sunday that the bill shouldn't be brought to a vote because it would add to the deficit. Contrast this with his insistence that the Bush tax cuts for the wealthy be extended before they expire at the end of this year, with a projected deficit increase of ~$700B over 10 years. Hmm, that's some really peculiar thinking. A fast-acting stimulus bill to help the unemployed is too expensive, but tax cuts for people making over $250K have to be extended with no budget offsets. It appears that there will be no economic recovery on the horizon unless the Democrats can pick up a super-majority and override this kind of obstructionism. It seems that the GOP is happy to have our economy in a shambles going into the mid-terms.

 

[turbo]

The foreclosed houses aren't selling. Banks are sitting on thousands of them.

My old place finally sold. We paid ~$60K for it over 20 years ago, and sold it in 2006 for over $120K. The people that bought it were single-income home-schoolers and they defaulted pretty promptly. The bank finally unloaded the place for about $80K, so they took a pretty good bath on it.

 

[edward]

My old place finally sold. We paid ~$60K for it over 20 years ago, and sold it in 2006 for over $120K. The people that bought it were single-income home-schoolers and they defaulted pretty promptly. The bank finally unloaded the place for about $80K, so they took a pretty good bath on it.

That is typical. The banks are now pushing back the auction dates of many properties.

However, now that banks have so many foreclosures on their books, many foreclosure auctions are simply being postponed for no apparent reason. While more homeowners than ever are applying for assistance, even more sheriff sales are being delayed. In addition, lenders are often incompetent enough to proceed with a public auction of a home even if the borrowers are negotiating for a loan modification or other plan.

This indicates that the banks are voluntarily postponing some sheriff auctions in order to avoid having to declare the loans as losses and then declaring the properties as assets at their true market values. Banks have gotten away for years with overestimating values of homes in order to inflate the values of the loans on the properties and the securities made up of these mortgage debts.

http://ezinearticles.com/?Banks-Delaying-Foreclosure-Auctions-to-Prevent-Losses&id=3349766

I track a lot of local properties through the County assessors office and the ReconTrust web site. The banks are definitely now pushing back auction dates.

EDIT: I can see where this is going to leave another real estate hole for us to fall into at some point in the future.

 

[turbo]

The bank was pretty fortunate because the house is in a nice neighborhood, and didn't get raided, stripped of copper pipes, etc. To our north was the fire chief, across from him was the head of purchasing for the paper mill, directly across from us was VP and senior loan officer of the local savings bank, next to him was a very prominent commercial appraiser, and right beside us was a pair of school-teachers. Down at the end of the dead-end was a real harpy who would call the cops on a whim and poked her nose into everything. Definitely a great neighborhood for an abandoned property. Other foreclosed properties in that town did not fare as well. With lost jobs, low incomes, and high scrap prices, lots of places got damaged by thieves stripping out copper pipes and other valuables.

 

[mheslep]

Here is the propsed route for the keystone pipeline.

Yes, I understand, and my point was that Chairman Waxman intends to block it (insanely in my view) and not for any American xenophobic reasons. So, I'll say it again:

I think we should expect to see oil imports increase, especially middle eastern oil, given current [or pending] policy: deep water drilling moratorium, and proposed bans or tariffs on Canadian tar sands oil.

 

[OmCheeto]

The Senate just passed Wall Street reform. The bill will become law the moment President Obama signs it.

What will this do to the economic recovery?

 

[turbo]

What will this do to the economic recovery?

Precious little, I fear. I understand that there are some provisions for consumer-protection for borrowers and individual investors, but Wall Street will still continue business as usual.

 

[mheslep]

What will this do to the economic recovery?

Well the more direct question is what will it do to financial stability in the future? The answer, given 2500 pages of gimmicks and special interest insertions, I think, is who knows? Random crap shoot, thank you Congress.

 

[OmCheeto]

Well the more direct question is what will it do to financial stability in the future? The answer, given 2500 pages of gimmicks and special interest insertions, I think, is who knows? Random crap shoot, thank you Congress.

Anyone have a link to the bill?

I'll read it tomorrow though.

I'm off to sit in the river somewhere.

Too much seriousness can make you crazy.

Don't need that right now.

 

[brainstorm]

The foreclosed houses aren't selling. Banks are sitting on thousands of them.

There seems to be little capacity left to comprehend how an economy works when it's not a long-term subsidiary of appreciation-driven fiscal stimulus. Nowhere in economic theory, that I am familiar with, does it say that persistent appreciation of property values is a requirement for supply and demand to function properly.

What is happening, however, is that the long trend of property-market appreciation has resulted in psychological resistance to imagining the deflationary trend could be anything but temporary. Couple this with the fact that there are extreme precedents for fiscal stimulus to ensure re-inflation, including pre-wwii new-deal programs, leading up the the creation of the military-industrial complex, and Freddie/Fannie as dispersion mechanisms to ensure the widespread distribution of government-stimulated income.

People are simply no longer capable of believing that government WON'T intervene in some way that re-establishes persistent inflation and therefore appreciation of their properties. Of course, if they would believe that property prices were going to eventually depreciate to pre-1930s values, they would sell as quickly as possible and the resulting crash would be so great that prices would completely reset as low as $1 per house.

Of course, even at $1/house, buying surplus property is a risk since it requires maintenance, tax-payments, and protection from thieves like the ones described a few posts back who want copper pipes, etc. (hint: use PVC instead of copper - or start lobbying your local building-code writers to make it legal).

Eventually, either the economy will have to adjust to reset all costs of property-ownership to make them attractive as hobby property OR something will have to happen which makes it likely for them to generate income either as rentals or sales. This will presumably occur when oil-independent transit has evolved to a level sufficient to allow people to occupy multiple properties without driving the economy into oil-recession.

Of course, for people to occupy multiple residences, other factors also come into play such as the ability to structure employment around seasonal migrations, etc. Presumably if people could afford to work someplace warm in the winter and/or migrate someplace cooler for the summer, they would. But this would also create a heavy burden on infrastructure, including oil-supply distribution, unless a highly space-efficient and fuel-efficient form of long-distance transit became dominant. I'm thinking this would either involve electric trains running on nuclear power or something more radically energy-conservative such as nomadism where people spend several months/year hiking between destinations.

Sustained nomadism is actually not as an obscure a possibility as it may sound, considering advances in IT that could allow people to work en route using portable media, for example, or planning a work schedule that would allow them to work a few weeks in each city over a series of intermediate destinations. This would, of course, involve radical innovations in management and human-resources, etc. People would have to have places to stay, en route, for example, which would require maintenance and housekeeping on a scale that would exceed the capacity of existing motels and campgrounds, especially with current standards of housekeeping (fresh towels and sheets every day!). Foreclosed houses could be made available as transient residences, but unless people could treat these properties like their own personal investment, owners would be reluctant to rent them out on a week-by-week basis. If this was the only way to pay the taxes and insurance, though, surely some would consider it.

 

[mheslep]

Minority Leader McConnel:

The Senate Republican leader, Mitch McConnell of Kentucky, spoke just as forcefully against the legislation. “The American people don’t seem to like this government-driven solution to the financial crisis any more than they like the Democrats’ government-driven solution to the nation’s health care crisis,” he said.

Citing a study by the United States Chamber of Commerce, a leading business group, Mr. McConnell said the bill would require 70 new federal regulations through the new consumer financial protection bureau, 11 new regulations through the Federal Deposit Insurance Corporation, 30 new regulations through the Federal Reserve and 205 new regulations through the S.E.C.

“All told, this bill would impose 533 new regulations on individuals and small businesses,” Mr. McConnell said. “That will inevitably lead to the kind of confusion and uncertainty that will make it even harder for struggling businesses to dig themselves out of the recession.

http://www.nytimes.com/2010/07/16/b...pagewanted=2&_r=1&partner=rss&emc=rss&src=igw

 

[brainstorm]

Minority Leader McConnel:


http://www.nytimes.com/2010/07/16/b...pagewanted=2&_r=1&partner=rss&emc=rss&src=igw

Businesses "digging themselves out of the recession" is not what cures recession. If recession was caused by the behavior of individual businesses, it wouldn't be system-wide, would it? The only thing that can cause the recession as a whole to improve is system-wide changes that may occur as a result of invisible-hand governance or government regulations and other interventions.

Part of the reason why the recession is dragging along so slowly is because there's a large proportion of businesses and/or individuals that are hedged against having to make appropriate changes to their activities, behavior, culture, lifestyles, etc. These people and businesses are not adapting to reduced demand by lowering their prices and the salaries of their employees because they want economic recovery to mean they can go back to consuming as much as they did before the recession. That's not possible, though, because the thing that caused the recession to start with was economic growth that overextended the global oil-supply. So the only thing that is going to improve this economy is restructuring and reform that reduces global per-capital oil consumption.

Once enough oil-thrifty economic and lifestyle practices are developed to allow the economic growth to occur without running into oil crisis, which spikes prices of everything when everyone getting paid is oil-dependent - once that happens economic growth can occur without the bottleneck of oil-scarcity. Until then, giving businesses more freedom to hedge themselves against price-competition is not going to do anything except prolong recovery.

 

[Astronuc]

The chief executives of the 50 firms that laid off the most workers so far during the economic crisis enjoyed salaries that are 42% higher than the average pay of chief executives of other S&P 500 companies, according to a new study.

As MarketWatch's Steve Goldstein notes in his story today, that CEO list was topped by ex-Schering Plough chief Fred Hassan, who earned $49.65 million in 2009. After their merger, his company and Merck laid off a combined 16,000 workers.

By way of comparison, women's median weekly wage is $704, which translates into about $36,600 per year. Men's is about $44,770.

It's true that those CEOs, possibly as a result of the layoffs, may have been directly responsible for pushing their company's stock price higher, probably benefiting many, many investors. See Goldstein's story for more data on that.

But the wage differential still staggers: $44,770 -- assuming you still have a job and that it pays the median wage -- versus $49,650,000. That executive's pay is more than 1,100 times higher than the worker's. Sure, it matters what industry you work in, and what your skills are, and maybe how educated you are, and how many people you're responsible for. But does it matter that much?
. . . .

So the economy has recovered and it's back to normal. What a relief. I was really worried.
http://www.marketwatch.com/story/ceos-that-lay-off-workers-earn-more-study-2010-09-01

 

[mugaliens]

There seems to be little capacity left to comprehend how an economy works when it's not a long-term subsidiary of appreciation-driven fiscal stimulus. Nowhere in economic theory, that I am familiar with, does it say that persistent appreciation of property values is a requirement for supply and demand to function properly.

Property value appreciation is largely a fuction of decreasing land near population hubs as world populations have grown over the last 10,000 years in response to our switch from a hunting and foraging lifestyle to an agrarian and industrialized one. Between about 70,000 BC until the time we developed agriculture, http://en.wikipedia.org/wiki/World_population" had stabilized at approximately one million people worldwide. We're currently around 7,000 times greater than that. Such is the miracle of our age.

What is happening, however, is that the long trend of property-market appreciation has resulted in psychological resistance to imagining the deflationary trend could be anything but temporary. Couple this with the fact that there are extreme precedents for fiscal stimulus to ensure re-inflation, including pre-wwii new-deal programs, leading up the the creation of the military-industrial complex, and Freddie/Fannie as dispersion mechanisms to ensure the widespread distribution of government-stimulated income.

Money has probably been around longer than civilization, with makers of tools or skilled hunters perhaps trading their handiwork for meals. We're only two steps away from this barter economy. The first is the physical money step, wherein money is used in place of bartered goods. The second is the abstract money step, wherein dollars exist only as bits in a system which absolutely must be kept stable lest our world as we know it were to come crashing down.

Interestingly, barter economies work best when coupled with generosity, "lagniappe," as it were. Without it most of our society would be in the have-nots, oppressed, poor, and downtrodden, beholdent to those at the top in some way.

What it means is that everyone works a little harder than is necessary for one's own existence, and as a result, there's always a bit more of everything to go around. One of the best models of this in our modern world are the Amish.

It is not inconceivable we may one day return to a barter system based on man-hours, possibly at standardized rates for various commodities. An apple, for example, might be worth 0.03 man-hours, while a 3,000 sq ft ranch house on a quarter-acrew lot might be worth 10,000 man-hours. The man-hours would roughly reflect actual man-hours required for all aspects of development. Expert services in disciplines which are needed but in which few people have the skills required to become an expert might reflect the actual time and effort required to attain those skills, or they may be left to the economics of a barter economy.

As there are only so many hours in a day, "salaries" would flatten considerably, but we've seen this trend already. The salaries disparity between school teachers and engineers has been narrowing, and while each require different skill sets, both avenues require roughly the same level of time and effort to attain and remain current or qualified.

People are simply no longer capable of believing that government WON'T intervene in some way that re-establishes persistent inflation and therefore appreciation of their properties.

If the government would stop intervening at the drop of a hat, this belief would rapidly evaporate. However, that government wouldn't remain in office very long. Two hundred twenty-four years ago, our government had little ability to redistribute the wealth, so when deciding who to elect to office, most people's idea of our government was one of "what's best for our country?" as it was generally thought that what was best for the country would be best for the state, county, and municipality. These days there are so many programs designed to redistribute wealth that most people look at "what's best for me?" Little has changed in the minds of the people. It's just that there are so many programs for wealth redistribution that the demographics and political ideals of those who're elected to office have changed.

Eventually, either the economy will have to adjust to reset all costs of property-ownership to make them attractive as hobby property OR something will have to happen which makes it likely for them to generate income either as rentals or sales.

Agreed. I seriously considered either buying or building a house when I moved back to the U.S. last year, but between the economy and the way my finances are arranged, it meant both a lot of work (houses are a lot of work) and a reduction in freedom with my time. As it was, I chose to move into an apartment. I sometimes cringe when I consider the fact I'm not "building equity," but when I add up all the variables, especially the hidden ones which take so much time, it's pretty much a wash.

Of course, for people to occupy multiple residences, other factors also come into play such as the ability to structure employment around seasonal migrations, etc. Presumably if people could afford to work someplace warm in the winter and/or migrate someplace cooler for the summer, they would. But this would also create a heavy burden on infrastructure, including oil-supply distribution, unless a highly space-efficient and fuel-efficient form of long-distance transit became dominant. I'm thinking this would either involve electric trains running on nuclear power or something more radically energy-conservative such as nomadism where people spend several months/year hiking between destinations.

As for http://en.wikipedia.org/wiki/Fuel_efficiency_in_transportation" , electric trains are very efficient, at an energy equivalence of between 400 and 700 pmpg (passenger mpg), but that's only when fully loaded and on cross-country trips. Trips with multiple stops are far less efficient, and hotel power (lights, air-conditioning) add a 35% penalty. One might think walking is efficient, as 228 pmpg, but given the many months a cross-country trip would make, it's not. Cycling actually gets 630 pmpg, and most people in decent shape could cross the U.S. in about a month.

The most efficient way to travel cross-country is to ship your vehicle in a car-carrier on a sleeper train, but this isn't the least expensive way to go. Amtrak hasn't cracked the nut on how best to do this, yet.

Sustained nomadism is actually not as an obscure a possibility as it may sound, considering advances in IT that could allow people to work en route using portable media, for example, or planning a work schedule that would allow them to work a few weeks in each city over a series of intermediate destinations. This would, of course, involve radical innovations in management and human-resources, etc. People would have to have places to stay, en route, for example, which would require maintenance and housekeeping on a scale that would exceed the capacity of existing motels and campgrounds, especially with current standards of housekeeping (fresh towels and sheets every day!).

While technology enhances mobility, I envision technology reducing nomadism, not increasing it. My grandfather was district sales manager for a large company for the last twenty-five years of his career. The days of wide-ranging traveling salesmen, however, are largely over. True, a lot of specialized IT apps require on-site installation, but while some of that is increasing, support and maintenance functions are largely handled remotely via VPNs.

Being out on the road is expensive, and hiking across country is far more expensive than driving it due to the cost in time, food, and gear. For example, I can travel from here to California in three days, costing me about $100 in hotels and food, with vehicle costs being the most expensive at about $276 in gas, oil, tires, and other direct wear-and tear items. Assuming an average, $50,000/yr in wages, the time cost comes to another $450 to $600, depending on the days travelled!

Total cost: nearly $900, and that's just one-way! $1,800 round-trip.

If I were to hike there instead, the cost in time alone would be more than $25,000. Add in meals, shoes, gear, etc., and you're looking at a $35,000 trip, minimum, one way, for a $70,000 RT cost.

Yet I can fly there and rent a car for a week, staying in a hotel, for just $750 RT. Peanuts, by comparison.

Nomadic lifestyles are NOT cheap. It's one of the reasons our world was only able to support (or we were able to support ourselves) a million humans in hunter-gather mode, while it can support 7,000 times as many humans in agrarian mode.

 

[Astronuc]

This is a growing concern. Chinese companies are accumulating substantial resources, and in some cases, near monopolies.

http://www.usnews.com/articles/news...new-energy-dependency-chinas-metals_print.htm

Molycorp (MCP) recently offered stock publicly. The stock price has more than doubled. It'll be interesting to watch.

Shares in junior miner Rare Element Resources were up as much as 28 percent on Monday, as buzz around the sector continued to boost miners with rare Earth properties in the United States.
http://uk.reuters.com/article/idUKN1828089520101018

Glencore is a privately held company which produces and markets commodities. They have mining and minerals subsidiaries.
http://www.glencore.com/pages/group_structure_metals.htm

Just some examples of interesting developments in the global economy. It certainly does look like China is putting the squeeze on RE supplies, but that's only because they control about 97% of the global production. They had good forsight, and the rest of the world more or less ignored the obvious.

Now interestingly, the US government doesn't seem too concerned about folks who park supertankers (very large crude carriers) off-shore in order to put upward pressure on oil prices.

Is there really a difference between a government or a private corporation manipulating the market for one or more commodities?

 

[brainstorm]

Being out on the road is expensive, and hiking across country is far more expensive than driving it due to the cost in time, food, and gear. For example, I can travel from here to California in three days, costing me about $100 in hotels and food, with vehicle costs being the most expensive at about $276 in gas, oil, tires, and other direct wear-and tear items. Assuming an average, $50,000/yr in wages, the time cost comes to another $450 to $600, depending on the days travelled!

Total cost: nearly $900, and that's just one-way! $1,800 round-trip.

If I were to hike there instead, the cost in time alone would be more than $25,000. Add in meals, shoes, gear, etc., and you're looking at a $35,000 trip, minimum, one way, for a $70,000 RT cost.

Yet I can fly there and rent a car for a week, staying in a hotel, for just $750 RT. Peanuts, by comparison.

Nomadic lifestyles are NOT cheap. It's one of the reasons our world was only able to support (or we were able to support ourselves) a million humans in hunter-gather mode, while it can support 7,000 times as many humans in agrarian mode.

Recently, I've noticed some developments in urban camping in Europe, such as multistory tent platforms, that make it seem like larger scale nomadism could be possible with reduced costs. As I mentioned in my earlier post, much of the expense of traveling is due to the assumption that people should be less self-sufficient en route than they are at home. Motels, therefore, cater to this by providing room-cleaning, towels, linens, etc. with dedicated service personnel servicing travelers in ways they would service themselves at home. If travelers were self-servicing en route the way they would at home, you would think the possibility of living nomadically for the same cost as staying-put would become more of a possibility.

Hostels or camping facilities could provide showers, kitchens, and laundry facilities while people manage their own linens, towels, etc. or contribute their own labor to facility-maintenance. This all sounds incredibly alien from the perspective of a normative service culture where people expect everything to be done for them and labor is typically performed by individuals at a single workplace. However, consider that a personnel intermediary service could create an online system that keeps track of peoples work-hours at multiple sites en route to a destination. In this way, you could work as you travel, putting in hours at each subsequent facility you stayed at. This way, travel costs would be compensated or at least offset by labor contributions of travelers.

I think the biggest obstacle to widespread nomadism, however, is a general cultural suspicion for strangers in general and wandering strangers in particular. Many people would simply find it unsettling to have a large portion of the population of any given locality inhabited by transient residents. This is a prejudice based on stereotypes or just a sense that people aren't as socially responsible toward others they feel unlikely to encounter in the future.

Either way, if travelers were socially responsible, it could be good for people to spend a good portion of their time walking or biking from place to place while telecommuting using online networks that allow them to work from anywhere using wifi and cellular service. They could spend the fall walking/biking south, which would save a great deal in heating costs and CO2 output. Then they could spend the springs walking/biking north to escape the heat. Perhaps in the distant future, interstate highways will be shaded by trees and solar panels and the different lanes will be utilized by people biking, walking, using relatively slow electric vehicles, etc. with more rest-facilities, campgrounds, and self-service motels/hostels at shorter intervals.

If nothing else, people would be a lot healthier from all that walking/biking and they would be generating plenty of body-heat, which would reduce the need for heating and a/c, which would save loads of energy. If you compare this scenario with the energy-efficiency concept of the Matrix, this one seems a lot more pleasant, imo.

 

[CRGreathouse]

they would be generating plenty of body-heat, which would reduce the need for heating and a/c, which would save loads of energy.

How would generating lots of body heat reduce the need for AC?

 

[brainstorm]

How would generating lots of body heat reduce the need for AC?

Exercising outdoors helps acclimatize people to heat. Although this effect seems slight by objective measures, I think the psychological effect is significant. By exercising outdoors, resting feels relatively cool by contrast to exertion. Compare this to spending most of the time in a/c and then exercising outdoors in the heat, where returning to the a/c feels almost like a need and even cooler temperatures are desired to return to an indoor comfort level.

This seems like a deviation from the thread topic, but it is actually quite pertinent because climate control can be quite expensive, which raises the amount of income people need so that they can afford higher utility costs. Lower standards of climate control would lower business costs for retailers and other workplaces as well as lowering people's monthly expenses.

 

[mheslep]

Just some examples of interesting developments in the global economy. It certainly does look like China is putting the squeeze on RE supplies, but that's only because they control about 97% of the global production. They had good forsight, and the rest of the world more or less ignored the obvious.

Yes apparently the Chinese have implemented an export quota on Rare Earth's, saying it was a matter of their 'sovereignty', blah, blah. Well the WTO prohibits extra-treaty export quotas. The US&Europe could easily make the argument that banning the import of Chinese manufactures was a matter of their sovereignty, blah, blah, if that was all that mattered.

 

[edward]

Molycorp (MCP) recently offered stock publicly. The stock price has more than doubled. It'll be interesting to watch.

Shares in junior miner Rare Element Resources were up as much as 28 percent on Monday, as buzz around the sector continued to boost miners with rare Earth properties in the United States.
http://uk.reuters.com/article/idUKN1828089520101018

Glencore is a privately held company which produces and markets commodities. They have mining and minerals subsidiaries.
http://www.glencore.com/pages/group_structure_metals.htm

Just some examples of interesting developments in the global economy. It certainly does look like China is putting the squeeze on RE supplies, but that's only because they control about 97% of the global production. They had good forsight, and the rest of the world more or less ignored the obvious.

Now interestingly, the US government doesn't seem too concerned about folks who park supertankers (very large crude carriers) off-shore in order to put upward pressure on oil prices.

Is there really a difference between a government or a private corporation manipulating the market for one or more commodities?

China's strategic planning regarding the rare Earth's is alarming.

When they tried to buy Unocal a few years ago they weren't thinking about the oil.

The GAO report lists the mine at Mountain Pass, California as perhaps the largest non-Chinese rare Earth deposit in the world. That same mine almost slipped out of U.S. hands unnoticed during a Chinese bid for the U.S. oil company Unocal in 2005.

Unocal had purchased the Mountain Pass mine owner, Molycorp, back in 1978. But that fact went mostly unnoticed during the media and Congressional uproar over the possible threat to U.S. energy security, which eventually led the Chinese company to withdraw its bid.

http://www.technewsdaily.com/us-military-supply-of-rare-earth-elements-not-secure-0430/

If China gains a strangle hold on RE we can kiss recovery good bye.

 

[CAC1001]

It is in China's best interest for America to recover. They need us to buy all their stuff. The only reason their economy has been continuing to grow as of late is because they implemented a massive stimulus into their economy, and unlike in America, there is no problem with private property, environmentalists, plus a lot of their corporations are government-owned and run, and the banking system is government-run. So when they tell the banks to lend, they lend. And when they tell the businesses to take the loans, they do so.

Much of their economy right now is based on construction, and they have been continuing to build skyscrapers even though many of the current ones are vacant. The Chinese government can only continue to stimulate their economy for so long with this artificial demand. They need American demand to come back into play, and that requires a healthy American economy.

 

[mheslep]

It is in China's best interest for America to recover. They need us to buy all their stuff. The only reason their economy has been continuing to grow as of late is because they implemented a massive stimulus into their economy,

Do you have a source for the figures on Chinese stimulus? First, what I'd seen earlier was not 'massive' by the US standard, and second any reporting on Chinese government spending is only as accurate as the Chinese government allows it to be.

 

[CAC1001]

Do you have a source for the figures on Chinese stimulus? First, what I'd seen earlier was not 'massive' by the US standard, and second any reporting on Chinese government spending is only as accurate as the Chinese government allows it to be.

http://www.heritage.org/research/reports/2010/07/chinas-suspect-economic-data
http://www.nytimes.com/2010/01/21/business/global/21iht-rglofinch.html
http://en.wikipedia.org/wiki/China_economic_stimulus_program

It was about $586 billion. China has a $4.9 trillion GDP (as of 2009), so $586 billion is about 12% of their GDP. By "massive," I meant in proportion ot the size of their overall economy. Also, in China, stimulus probably has a much better chance of working than in a place like the United States.

I agree on one must take Chinese figures with a grain of salt, there was some speculaton a while back that they were overinflating their GDP.

 

[mheslep]

It was about $586 billion. China has a $4.9 trillion GDP (as of 2009), so $586 billion is about 12% of their GDP. By "massive," I meant in proportion ot the size of their overall economy.

Yes they say it was about $586B, and that's over a couple years.

Also, in China, stimulus probably has a much better chance of working than in a place like the United States.

Why? That is, why would spending drive demand more in a communist government / ~capitalist market country?