Thursday, 29 November 2012

07:34 – Front page article in the newspaper this morning about a young local couple that are in the running for Parents of the Year. They’re both 20 years old. He was playing video games at 5:00 a.m. when their 2-week-old baby disturbed him. So he did what any father would do; picked her up by the neck and punched her to death. The woman, like all mothers, paid close attention to her new baby. Around 2:00 in the afternoon, she finally got around to checking on the baby and found her dead. Before calling 911, the two of them discussed their options. Among those were hiding the body, claiming the baby had been kidnapped, and fleeing to the mountains. He’s charged with first-degree murder; she with accessory after the fact. No word on what’s happened to their 15-month-old son, who presumably is in the care of social services.

Work continues on the new science kits.


11:20 – It seems that the Bank of England has finally realized that the Big Four UK banks are sitting on a boatload of PIIGS sovereign, bank, and corporate debt, something like $250 billion total. Because they don’t mark to market, these banks are carrying that $250 billion at book value on their P&L statements, when in reality it’s worth significantly less. Sir Mervyn King, the outgoing Governor of the BoE suggests that these four banks require recapitalization to the tune of $50 billion or so. I don’t think that’s going to be enough. In the long run, $250 billion is closer to the correct number.

And, speaking of the long run, the BoE has an interesting graphic in its latest Financial Stability Report. Based on CDS premiums, they estimate a 5-year probability of default for various EU countries. Greece, of course, has a 5-year probability of default of > 100% (I know, but that’s what the numbers say…), so it isn’t even present on the graphic. Portugal is currently around 60%, Ireland and Spain about 40%, Italy around 30%, and France 15%. I think these numbers are low, because they don’t take into account the domino effect; when Greece finally collapses, investors’ attention immediately shifts to the next weakest country, causing it to collapse, and then on and on until the whole row of dominoes falls. My gut reaction is that the probability of France defaulting within five years is probably in the 80% to 90% range, with the others correspondingly higher. There’s only so long that the inevitable collapse of the euro can be staved off with smoke and mirrors. I have to admit that Merkel is doing a good job of that so far, but the tools she has available are about used up.


15:45 – As I knew it would when the latest Greek deal was announced a couple of days ago, it’s falling apart already. The IMF is really getting tired of empty promises and bogus economic forecasts. As should be obvious to anyone, Greece has absolutely zero chance of ever paying back that $400 billion mountain of debt. If the EC/IMF/ECB were using sane accounting practices, they’d already have written off all of it. As things stand now, all of the Greek debt held by the EC/ECB is effectively uncollectable. The IMF, recognizing that even as senior creditor, it is unlikely to be able to collect more than a small fraction of what is owed to it, even if the eurozone debt-holders get nothing, the IMF is determined not to throw good money after bad. And Holland and Finland feel pretty much the same way. They know that the money they previously lent is lost, and they’re not about to take any more of a hit by lending still more.

37 thoughts on “Thursday, 29 November 2012”

  1. Ouch. Thanks for that cheery bit of news. I think I’ll go bang my head on a concrete wall, to get some relief. :-0

  2. Until the late 60’s or early 70’s, North Carolina was one of many governments that sterilized stupid people. I can’t help but think that the world would have been better off if this woman had been spayed. Or, come to think of it, if her mother had been spayed.

  3. Unfortunately, as ever, no shortage of stupid, brutish halflings and orcs.

    Yeah, I see the PIIGS going down over the next three to five years followed by France and the northern tier, possibly the UK itself, near the end of that time. It will run like a downhill snowball by then. This can’t help but affect North America as well to what extent we do not know. But considering the criminal scum who run the State here, I would expect a pretty bad scene.

  4. Well, all of us–EU, US, UK, Canada, Australia, NZ–are already impoverished but few people fully grasp just how much so. It’ll become obvious even to average people as the bills continue to come due.

    I expect most or all of the southern tier EU to return to third-world status. Things will be better in the northern tier and UK, although still pretty bad. They’ll be better still in the US and Canada. We’ll be a lot poorer, but I don’t really see any major collapse here. In fact, as I’ve said repeatedly, I think we’ll be able to grow our way out of the problem. It’s amazing what can be done with cheap energy, and the US and Canada have that in abundance. I don’t really know enough about their geopolitical situations to make a good prediction for AUS/NZ. On the good side, both are wealthy and they have abundant natural resources. On the bad side, they’re much too close to and dependent upon China and its markets, and that’s a very bad place to be.

  5. Horrendous news about those parents. Just awful…

    I wonder if things will go so badly in Europe as you predict. I guess I’ll find out as I age. Should I think about moving to Canada when I finish my undergrad?

  6. Oh, hell yes. Canada is among the best places to be. Barbara and I might end up there as refugees if things get a lot worse than I expect them to. In fact, Canada is among the best places to be, period. The English-speaking world in general will do much better through the coming bad years than the rest of the planet, but the US and Canada are the standouts for many reasons. I have a very high regard for Aussies and N-zedders, but they’re isolated off by themselves. As to Britain, well it’s too close to Europe in every sense of the word. The Britain that stood through the blitz would do fine, but I don’t think that Britain is there anymore. And Cameron seems determined for Britain to remain a part of the EU, which historians will see in retrospect as a huge mistake.

    So, yeah. Things can change very, very quickly. If it were me, I’d get to Canada as quickly as I could.

  7. O Kanada DOES have some outstanding universities and students are made to actually do work in them and behave. They’re way cheaper than skools down there, too; our son is an Honors History grad of Bishops in Lennoxville, Quebec and our daughter is at McGill right now. They’re both dual-citizens so get even huger discounts and daughter also speaks French, another huge plus up there.

    But if one is a gun-rights anarchist wack job like OFD, not so great.

  8. Being isolated is a Good Thing, although we are too close to Indonesia for my liking.

  9. Here’s my problem with becoming a Canadian citizen:

    I swear that I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth II, Queen of Canada, Her Heirs and Successors, and that I will faithfully observe the laws of Canada and fulfil my duties as a Canadian citizen.

  10. But if one is a gun-rights anarchist wack job like OFD, not so great.

    I thought Canada was pretty reasonable about rifles and shotguns, less so about pistols and automatic weapons.

  11. I swear that I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth II, Queen of Canada, Her Heirs and Successors

    I don’t think anyone really takes that seriously. I mean, look at the buffoon she spawned.

  12. Buffoons.

    Don’t you know the difference between singular and plural?

    I take it seriously because the alternatives are worse. Long Live Her Majesty!

  13. I’m gonna stick with them what brought me, i.e. my fellow right-thinking Americans and ancestors here. Retroville just suits me right down to the ground. And I’m not sure what I woulda done at the time, given the lack of support from Congress and half the country at least, but I’m glad we had our first Revolution and told the Brits and His Majesty to sod off. Not so happy, not happy at all, in fact, with the third of the Cousins’ Wars.

    As for Canadian firearms laws, perhaps one of our northern correspondents would be so good as to fill us in on the latest. I also have the impression that the government is fairly reasonable (though not as I define it) with rifles and shotguns but not nearly so with handguns. I should probably check in with the hunters that travel up that way and see what the current deal is on bringing firearms into the country for that purpose. I also note that there has been a thriving smuggling trade going on along the Vampire State border for a while now, involving Mohawk nations and the Hell’s Angels, though not always together.

  14. He’ll never move north, he’d have to leave too much of his stuff behind. I’d bet on Minn., Mont. or ND.

    I’d rather live in Kanukistan then Obamaland but then I’m used to not having a small arsenal at my disposal.

    Patience. Obama has only four more years then he’ll retire and write his memoirs.

  15. “I wonder if things will go so badly in Europe as you predict. I guess I’ll find out as I age. Should I think about moving to Canada when I finish my undergrad?”

    Come to Australia. We have a nice climate, beaches, chicks and first rate universities. The birds (assuming that’s your thing) in Canukistan are probably heavily rugged up for 11 months of the year.

  16. greg is right about the birds up here in northern climes; they may as well be wearing burkhas for much of the year. (it’s pretty neat, though, if we get an Indian Summer; then they practically strip buck-nekkid and frolic about without a care in the world.

    I would, however, if U R seriously thinking about grad skool, look into the ones up there.

  17. Buffoons.

    Don’t you know the difference between singular and plural?

    I was referring to the Buffoon Apparent.

  18. And the hard truth here is that they would not get re-elected and that the people who vote would make that decision knowing full well that he is telling them the truth about the situation. They don’t wanna hear it. Same deal here; we saw what happened to Ron Paul. He scared the shit outta the GOP. As did Patrick Buchanan before him. To paraphrase the Jack Nicholson character; we can’t HANDLE the truth.

    Oh I am so glad to have been born when I was and be around to see the show over the next ten or twenty years (hopefully!). I will say that the first twenty or so years was a real trip!

  19. Well, it is worse here than many realized according to an article in the LA Times today. Many CA school districts are taking on bonded indebtedness of a different type. They don’t pay back principal and interest until many years downstream. Consequently, the ultimate payback may be 5 to 10 times, or more, of the amount loaned. Sound like a Trojan horse to fool the Greeks?

  20. From Miles: “Don’t you know the difference between singular and plural?”

    Hey Miles, it is different up here, sometimes?

    We use a singular verb form after a company, which we treat as singular, as it has no terminal “s”, I guess.

    Evidence: The opening scene of Mad Max (and I forget the full name: “…Kennedy… present Mad Max.” No terminal “s” on the presents.

    While we (with the clockwise bathtub drain) would say: “General Motors presents the new, 2013 Chevy Nova.”

    Above comment tongue-in-cheek, but I did wonder about it the first time I saw the movie (dubbed in USA dialect, I might add).

  21. Oh yeah, and under review I see, even when we have a terminal s as in my GM example.

  22. I saw Mad Max II (“The Road Warrior”) at the cinema and the narrator had a normal (Aussie) accent. When I saw it on TV several years later the narrator had this completely weird American accent. Spoiled it a bit.

    Mad Max II is one of the all time great movies. One of my neighbors lived out at Broken Hill in the early Eighties and remembers having to wait on a road out of BH, because the cops blocked the road to allow the chase scene. And MM I and III weren’t bad either.

  23. Since we never had Mad Max (I) first, they renamed Mad Max II for us as Road Warrior. Then when RW became a hit, the dubbed MM (I) and sent it to us.

    Now we have MG pemanently where he gets drunk, makes racial slurs and beats up women. Does Broken Hill want him back?

  24. We have no “gun nuts” here. Just normal people in a world of hoplophobes.

  25. Mel’s a Yank, actually, and I think the only time he went to BH was for the movie.

  26. Yep, everyone thinks Mel is from Oz, but nope; his dad moved the whole family to Oz when they were kids. His dad is a little bit strange. Even by my standards, so there ya go.

  27. I can’t fault his father’s decision to being the kids to Oz, but it seems to have been too little too late. Imagine what he’d have been like if he stayed in NY.

  28. The IMF is no real factor in solving the EU affair. They are nothing but a strong-arm Mafia, selling ‘protection’ for the cost of turning your economic control over to them completely if things go bad. Ask Argentina or Brazil. The IMF is an evil organization that has kept Africa in poverty and dictatorship for decades, until Africa finally started telling them to get lost.

    The prime minister of Luxembourg says, “We all know what to do, we just don’t know how to get re-elected after we have done it.”

    If they had any morals and balls, they would do it and gladly face the retirement firing squad. The real problem is that they have been elected too many times already. Guys like Juncker are just like the American Republican Party: nothing but a bunch of career hypocrites.

    Separately, a new Pew Research study shows that ethnic population growth in the US slowed during the last decade, but is still contributing most of the population growth to the US. If the Hispanic population of Illinois, Louisiana, Massachusetts, New Jersey, New York and Rhode Island had not grown, the population of those states would have declined. Michigan did suffer a population decline, even though its Hispanic population grew.

    Another interesting factoid: a Netherlands research firm has collated information on hemlines from 1920 to the present, and says short skirts are not precursors of better times. In fact, they are a lagging indicator of the economy—lagging by 3 years. Short skirts appearing in 2010 were from the 2007 boom before the bubbles collapsed, not from a slightly improved economy in 2010.

  29. I’ll admit to being a strong supporter of short hemlines… 🙂

    Summer starts tomorrow, and the local birdlife has been practicing for weeks. Oh joy… 🙂

    l think that a politician who avoids doing write because they want to be re-elected should be put in front of a firing squad.

  30. *doing write. doing right.

    Perhaps short hemlines are just an indicator that the fair sex have to economise during tough times…

  31. Short hemlines (and low moral standards) are just a girl’s way of advertising during tough economical times. It’s only affluent women who get to be choosy.

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