And let\’s not forget the beginning of the retirements of the boomers – they will remove even more money out of markets and place tremendous stress on the medical system, helping both to collapse. The perfect storm indeed.For those interested, I have another solar contractor coming in the morning. The second one came in at 20K – lower than the first. I am anxious to see where #3 comes in.Does anyone here have any experience with solar? I would like to talk to you if you do before I make any final decisions. I would be happy to send my email address to any posters with experience and opinions. Thanks.

Despite vigorous denial, LEH accessed FED funding today and will continue until married off or eaten by maggots.

For what its worth, saw a entrepeneur, scientist, investor all-in-one on the Glenn Beck show Sunday. The guest explained that the nano technology developments will increase the efficiency of solar photovoltaics (PV) exponentially over the next few years. Thus the dilemma, does one wait, and if so, for how long for technology advancement, before installing solar panels?

It doesn\’t come as breaking news to anyone here, but finally MSM is catching up on another big shoe waiting to drop.\"Credit-Card Use Is Surging, Risking Another Debt CrisisBy Jeff Cox, Special to CNBC.com | 03 Jun 2008 | 02:40 PM ETCash-strapped Americans are ringing up more and more purchases on their credit and debit cards, and there could be a steep price to pay ahead.Though the trend is a boon for the companies that issue the cards, analysts worry that there could be long-term problems not only for consumers but also for the anemic economy and the already-troubled banks that will be underwriting all that risky debt.\"http://www.cnbc.com/id/24948627

Nouriel, Looking at all that has happened, including an unexpected sharp rise in food and energy costs, GDP was up 1% (0.2% if you strip out inventory build) last quarter. Will GDP ever drop significantly? How do you reconcile this relatively mild downturn with your stark view of the world?

@Guest on 2008-06-03 17:02:39The People\’s Bank of China.Look at the last post by Brad Setser, the financial markets managed to survive thanks to the absolutely insame amount of money coming from China. There is no way China is going to get the value of its investment back so the only things taking the western financial and economic system toghether is the anti-economic (and straight insane) invesment decisions at the PBoC.

Hubbs,Thanks for the information. As is always the case, the next best thing is \"just around the corner\" and no doubt it will cost exponentially more. What is out there now will effectively meet the needs of our small family (we average only 530 KWH per month) and even if \"better\" PV systems come out soon, the ones I am looking at are supposed to last for 20-25 years. Perhaps when these are ready to be replaced I will look at the next generation.The next leg down and the relentless climb in oil prices will not wait for a few years and so for us, the time to make changes is now.

@ Medic,It may be an anodyne remark, but one good way to drive one\’s bills is developing \"thrift\" in energy resources usage (in their broader definition, but not only) and reducing waste through self-education and persistence by you and all your family especially your child (daughter?). Even if that economy does not show in material cost reductions, it helps build ‘responsible’ reflexes and it’s good for one’s conscience (you don’t need to give to charity). There are heroes in this world who don’t get recognized but their services are greater than Iliad-style epic heroes. I firmly believe that dead-weight resource waste (keeping water running while shaving, lights on in empty rooms, hoarded lands and purposefully-destroyed grains …) can largely cover basic nutritive needs for a large population on earth.I also say this as a reminder for myself too.

Written by Daltoni on 2008-06-03 19:08:06Your argurment is somewhat out of balance. Yes, we boomers have paid into the social system many of us very much to our detriment. However, generationally, we (the boomers) also borrowed the money out of the system to fund our current consumption, if one cares to observe the bookkeeping nonsense. Our generation is the one which made the promise to ourselves. At the same time, we promised on behalf of the next younger generation that they would fund it.Indeed we will continue to be productive – of necesisty because the kids cannot afford to pay us. I have very little sympathy for my generation.

More news from California:On July 10, the San Francisco Bar Association will be offering a seminar entitled \"Commercial Lease Issues in a Troubled Economy\". The seminar will cover \"typical commercial lease default and remedy scenarios encountered in a recession, creative options for keeping commercial tenants in their space in a down market, and how to avoid lease concessions that may complicate any subsequent bankruptcy.\" Lunch will be provided. Mandatory Continuing Legal Education credit of one hour.Recession should be a growth opportunity if you specialize in bankruptcy law.

The insolvent owned by the insolvent.http://www.nytimes.com/2008/06/04/business/04lend.html?ref=business

Medic,We have researched Solar for our secluded cabin in the catskills.I have much information for you…send emailwhat state are you in?I too am in healthcare…..sports med…I once asked you about the future of healthcare.Still in a deep fog here.Giovanni

Medic:Look into geothermal electric heat pumps also. (Elect is cheap here. Your milage may vary.)

As the trade deficit increased so did the credit bubble. It\’s been a long time in the making, but the last 8 years has sent both through the roof.The usual Congressional fixes–lower taxes or send out checks–never addresses the central issue: trade. Any leverage we may have had as prime consumer is fast disappearing down the drain.Other than selling stuff off, where do we go from here? If we have less and less to trade and buy more and more overseas stuff–often from our own companies who have plied labor, tax, and environmental arbitrage to great personal advantage–, I suggest we are moving into the dark night of the American soul.I would love to hear some solutions to the problem of trade, ones that actually address some central issues.

Prof. NR, your post seems a bit more serious about this \’recession\’. How do you justify your \’U\’ shaped recovery with your writings above?If the hurricane is wipping out most of the financials, what is left to ignite the recovery?

For everybody who is interested of the REAL situation og GM I would recommend to read this article: from http://www.nakedcapitalism.com/2008/02/on-sorry-state-of-general-motors.htmlOn the Sorry State of General MotorsListen to this article This is a very well done piece, presented as a letter from the chairman of GM, that gives an overview of the fall from grace of what was once America\’s premier corporation. ……..According to our most up-to-date balance sheet, we have about $37 billion in cash and receivables. That sounds like a lot of money. But we have matching liabilities for all of these assets – and more. Over the next 12 months, $5 billion of our long-term debt will come due. We have current accounts payable of $30 billion and other accrued expenses that mature in the next year of $34 billion. All totaled, we owe $70 billion within the next 12 months. (That\’s not including all of the rest of our long-term debt, pension liabilities, etc.)If you have $34 billion in your checking account and you\’ve got $70 billion worth of bills on your desk, you\’re not exactly \"cash rich\" are you?How will we pay for these obligations? How will we come up with the money we need to finance our long-term debts? There aren\’t any easy answers. And all of the possible solutions will be extremely painful to existing shareholders……and now buy:-)

Euribor(euro libor) 12 month 5.107%

Daltoni, thank you for your most trenchant post. It contains the true fundamentals that others should take serious note of. You\’re clearly the (good) wave of the future.Mark

Widening disparity between official hocus pocus data and consumer behavior. Simple folks don\’t behave in line with sophisticated financial fantasy land data fabrications:http://www.bloomberg.com/apps/news?pid=20601068&sid=axUMA_MNdqMo&refer=homeThe figures “reinforce concern over the strength of euro- zone consumer spending in the near term at least,\’\’ said Howard Archer, chief European economist at Global Insight in London. “Consumers are clearly reluctant, or unable, to lift their spending\’\’ because of elevated inflation, higher interest rates and concerns over the economic outlook, he said. Spoken of complacency fading away…

\"Fuel subsidies prevent oil demand from being destroyed\"Trust me, oil demand is still alive, abroad or domestically. oil rally to $200/barrel.http://www.nakedcapitalism.com/2008/06/morgan-stanley-on-role-of-subsidies-in.html

\"All that is well and good but that all pales in comparison to the overlooked fact of the matter which is that the \"boomers\" have been the most self absorbed greedy and short sighted generation in probably the history of the world and it is the boomers collective decision making and political expression that has brought us to our current situation. \"There is a very real risk in America that the next young generation will feel strong anger and resentment at the older citizens. They are likely to become very disenfranchized from the \"traditional values\" that we think of as being \"American\". And in large part – I can\’t blame them. I have warned before on this blog about the coming \"rage of our children\".On the one hand, many of the boomers worked very hard and tried to do good things for our country. On the other hand, the fiscal irresponsibility of the Gov\’t during the boomer generation – combined with a loss of real productivity as industrial jobs were exported to Asia (and Wall St turned to highly leveraged finance as a substitute during a time of low savings) – represents a terrible departure from earlier American values.Medic is right that the aging boomer population is going to place enormous strain on our health care system. There is no real solution. Many boomers will die in relative poverty and with comparatively poor health care. And the younger generation is not going to be terribly sympathetic – they just can\’t pay the taxes to fix the system. Quite possibly, many boomers may wind up moving to other countries to flee from these problems.PeteCA

Great speech by Richard Fisher from the Dallas Fed talking specifically about these issues. All our current political choices are completely avoiding working on solving any of these problems.http://dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

Here comes the market rally because oil is down to $123! Too bad oil is still about $60 a barrel too high for the US economy!

No healthcare reform can happen without realization that the following must change:Legal action against providers must be reduced significantly so we don\’t have to practice defensive (read: CYA) medicine – it is too costly.Reduce expectations of population and method of delivery – go to your primary care provider instead of an ER for minor stuff.Increase the numbers of providers and hands on staff (nurses) – we are short now by nearly 800,000 nurses nationally last I looked. If we paid them and treated them better (adequete staffing levels, giving us lunch breaks, etc.) some of us might stay. I have not received an anual increase that has kept pace with inflation for 10 years – why? Insurance companies making record profits, that\’s why. Which one of us can you live without?

In any action against Iran, Iran will try to block the staright of Hormuz. That will result in American action to occupy the Iranian side of the straight in order allow tanker passage.

all toliets on the planet are connected …do you enjoy watching your cousins play and drink from the fifthly river …

Boomers and retirementI guess I can’t help but chime in here. Sure the Boomers lived beyond their means but how and why did this happen? Madison Avenue hired the best psycho analysts and psychologists to figure out what buttons to push to sell things that people really didn’t need but could be persuaded that they did. Government, which isn’t us, decided to transfer the accumulation of wealth up the ladder to those at the top via inflation. They did this not only by debt but also by tax laws. These laws included the ones creating IRA’s and 401K’s but also tax credits to special interests and lies about how the SS trust fund was used to fund additional spending. The Boomers in general were penalized for savings and what they did save thru their IRA’s and 401K’s was used to fund Wall Street and the CEO’s. Government even took away the incentives for the working class to gain wealth by owing a few rentals.. There really was no good way to save or get ahead outside Wall Streets pervue. Even the tax credit for mortgage interest paid mostly benefited the upper class and didn\’t benefit most in the working class. But it is still sold as a middle class incentive. What a joke! It has been a long slow assault on the middle class and particularly the Boomers by our own government, controlled by Wall Street, the BIG banks and the Uber Wealthy. What amazes me is that people still don’t see the connection to what happened to them and the loss of power by the People. It is no longer of the people, by the people and for the people. Substitute corporation or wealthy and you get much closer to the truth. As to health care it is the same. We have been robbed by agribusiness and drug companies, lawyers and insurance company executives who care much more for their bottom line than they do for whether Americans are healthy or taken care of. I think that your concerns about Boomers should be how they will be able to work healthy into their 80’s because there really is no underlying support for them. The government is beyond broke and on the road to insolvent. The only thing they can do is create more debt and ultimately more rising costs to the working class thru rising prices. And if the Boomers can’t work because of ill health, then what? Soilient Green? Or just leaving them to die along side the road? Forbes and others have done studies of actual retirement savings by the Boomers outside their residences and it isn\’t much. SS is indexed to the government\’s version of inflation so don\’t expect that to even be of any real support. Without Enron type of accounting, many pension funds are already near insolvent and will be when all this toxic waste is marked to market. Boomers retiring? They may and then in a year or two be right back in the work force a much lower salaries than they had. Or sure some will have beaten the system but not most. I see it already, many have a job already. It is only going to get worse.

Written by Play On on 2008-06-04 10:27:39In any action against Iran, Iran will try to block the staright of Hormuz. That will result in American action to occupy the Iranian side of the straight in order allow tanker passage.1. How will the americans do this? How much military sense does it make to put your back to the water and fight an inland enemy? Where will the troops / equipment come from? How will they defeat current iranian fortifications on the coast? 2. how will occupying (if that works) allow tanker passage? Can the iranians not mine the straight? Can they not launch boats from further down the coast? Lets not forget what they learned from the cole… it doesn\’t take a military to blow up a destroyer, just 5 guys in speedboats.@PetacaIran doesn\’t want to defuse the crisis. They hold all the leverage. With regards to why they would not want to accept foreign determination of their future nuclear power generation — do you think the united states would allow russia to control their fuel supply? I think not. For the most part, iran is complying with the iaea. With the exception of the most recent report the iaea has been far more dovish than the western media.\"And given that the leader of Iran has stated his intention to see Israel eliminated completey (on several different occasions), it should come as no surprise if the Israeli\’s do indeed take strong action. \"ahmadinejad is by no means the leader of iran. he\’s more like bill frist.x00x

http://www.marketwatch.com/news/story/moodys-warns-may-downgrade-aaa/story.aspx?guid=%7B54658305%2DD005%2D4292%2D8653%2D232FF511DA15%7DMoody\’s says it may cut Aaa ratings of Ambac, MBIABond insurers\’ shares slump after ratings agency warning…\"We are surprised by both the timing and direction of this action and can only conclude that the requirements for a Triple-A rating continue to change,\" said Jay Brown, chairman and CEO of MBIA, in a statement…This guy is great.Hey my IQ is 40. I could be a CEO.

\"Bernanke Says Inflation `Significantly Higher\’ Than Fed Wants\" So, he and Paulson did not notice last September the dollar was pressing new all time lows with gold pressing all time highs when he emergency cut ? Who believes these people anymore ? Anyone ?

$5 Trillion Hidden Off Bank Balance Sheets The Financial Times is reporting US banks fear being forced to take $5,000bn back on balance sheets.Accounting changes could force US banks to take thousands of billions of dollars back on to their balance sheets in the coming months in a move that is likely to curb further their lending and could push them into new capital raisings, analysts have warned.Analysts at Citigroup said a planned tightening of the rules regarding off-balance sheet vehicles would force banks to reconsider arrangements and could result in up to $5,000bn of assets coming back on to the books.The off-balance sheet vehicles have been used by financial institutions to keep some assets off their balance sheets, thereby avoiding the need to hold regulatory capital against them.Birgit Specht, head of securitisation analysis at Citigroup, said: \"We think it is very likely that these vehicles will come back on balance sheet.\"This will not affect liquidity because [they] are funded, but it will affect debt-to-equity ratios [at banks] and so significantly impact banks\’ ability to lend.\"Both international and US accounting bodies are working on rule changes; the US standard-setter, the Financial Accounting Standards Board, is to decide today. US rulemakers have come under domestic pressure from regulators and policymakers who felt the rules allowed banks to hide too much of their exposure to subprime assets.Absurd SituationThe absurdity is not $5 trillion coming back on bank balance sheets. Rather the absurdity is with accounting rules that let banks hold this much stuff off balance sheets in the first place. It makes a mockery of stated leverage, value at risk, and capitalization ratios. Banks claim to be well capitalized but the ratio is a mere 6% and that 6% does not include the effects of hiding $5 trillion off balance sheets.For a look at Citigroup\’s capital ratios and leverage (the latter is 19:1) please consider Digging Into Citigroup\’s Numbers.FASB ReviewThe Financial Accountings Standards Board is discussing some of this today. Here is a link to (FASB Topics)FASB Balance Sheet BombshellUSBanker is writing FASB Lobs a Balance-Sheet Bombshell.Losses tied to banks’ off-balance-sheet subprime-mortgage investments have reached into the hundreds of billions of dollars and caused some real soul searching among the nation’s top accounting group, The Financial Accounting Standards Board, which has moved quickly to radically alter the rules for how banks must account for so-called qualified special-purpose entities, or QSPEs.Reform is needed and probably inevitable, but is FASB moving too fast? Some banks may sit on QSPEs, whose values are almost equal to their balance-sheet assets, analysts say. Forcing financial institutions to load up their balance sheets too soon with these still largely untradeable holdings could prolong the financial market’s misery.Reform is needed and probably inevitable, but is FASB moving too fast? Some banks may sit on QSPEs, whose values are almost equal to their balance-sheet assets, analysts say. Forcing financial institutions to load up their balance sheets too soon with these still largely untradeable holdings could prolong the financial market’s misery.Final FASB board deliberation is expected this month, with a public comment period starting in July, followed by a roundtable, at which critics are invited to “meet publicly with the board and debate,” Goldin notes. The changes could be finalized by late in the third quarter. The effective date: June 2009.That timeframe is a blink of the eye. Consider Citigroup, which told shareholders in May that it would divest nearly $500 billion of legacy assets in two or three years. A sizeable chunk of that is QSPE material, according to analysts — and would not be a welcome sight on Citi’s balance sheet. Several other money-center banks could face peril as a result of the rule change.The migration of exotics to the balance sheet may be inevitable. If so, the key is to make sure the path is constructive, and that includes a more gradual implementation of the new rules that FASB currently proposes. The world cannot afford another shock to the global financial marketsEveryone Wants TimeMinyan Peter, former treasurer at a large US Bank had these comments to offer.First the FASB is well aware of the box it is in and it knows that adding assets back to bank balance sheets at a time of deleveraging is not constructive to the current crisis.Second, and at the risk of alienating my CPA friends, what the FASB thinks is far less important right now than what the bank regulators think. RAP accounting, not GAAP is what the regulators focus on.And I highly doubt that the regulators are going to create a \"consolidation\" crisis any time soon.Are off-balance sheet assets significant? Absolutely, but they\’re also most significant for the world\’s largest banks.As a result, rather than a knee jerk reaction, I expect that we will see a very measured and studied approach to this issue from the FASB, the bank regulators as well as the SEC.Remember, everyone wants time.Warranted or not, Bernanke will drag this out as long as possible. The zombification of banks continues.Mike \"Mish\" Shedlockhttp://globaleconomicanalysis.blogspot.com

from Guest on 2008-06-03 17:02:39:* \"Looking at all that has happened, including an unexpected sharp rise in food and energy costs, GDP was up 1% (0.2% if you strip out inventory build) last quarter. Will GDP ever drop significantly? How do you reconcile this relatively mild downturn with your stark view of the world?\" *Most GDP \"growth\" came from a decrease in Imports. GDP was revised upward because US purchase of imports was revised downward by a whopping -$25.4 billion, from the original estimate of Q1 GDP from 4/30/08. Since imports subtract from GDP, this \"decline\" caused a dollar-for-dollar \"increase\" in US GDP. To put it another way, a -$25.4 billion DECLINE in American spending (on imports) caused a +$25.4 billion INCREASE in GDP. The Q1 GDP growth is now stated at $26.2 billion. Subtracting the $25.4 billion import change would give a Q1 GDP of only $0.8 billion, for an annualized growth of only 0.02%. This is approximately 0% GDP growth. But there\’s more. Growth in food purchases was also revised upward by +$4.7 billion, from -$1.6 billion on 4/30/08 to +$3.1 billion on 5/29/08. If this $4.7 billion is also subtracted, then Q1 GDP growth becomes -$3.9 billion. This gives an annualized GDP growth of -0.033%.(More details on these calculations can be found at: http://unlawflcombatnt.proboards84.com/index.cgi?board=general&action=display&thread=3219 )I\’d say Professor Roubini has been proven right on his predictions.

Dear Ben, You have been checkmated by the king (recession) and the queen (inflation). Please resign from the game. Perhaps next time the Fed can bring a better opponent. Yours truly, The Economy

\"\"Bernanke Says Inflation `Significantly Higher\’ Than Fed Wants\"So, he and Paulson did not notice last September the dollar was pressing new all time lows with gold pressing all time highs when he emergency cut ? Who believes these people anymore ? Anyone ?\"@ Capone on 2008-06-04 14:27:31Official incompetence follows a set course. The Primary Focus is to preside over… everything.Good men feel shame when they finally recognize their own incompetence so henceforth \’secrecy\’ is introduced as policy. This being inadequate for those nasty inquiring minds, false information (lies) is shilled and repeated over and over. Then comes manipulation; protecting the asses of ones friends and colleagues, family, bosses, supporters, cousins and of course, the political head of the beast that is being ridden is of prime importance. Next comes Plan B, always late, but these are not grande thinkers, where to run, where to hide money and how to ensure a comeback so as to escape the hanging tree.When the individual thought processes are relegated to the collective fungal mat, there becomes only one priority which is the survival of that fungal mat; that is to say, individual survival is not important SOoooo, as the fungal mat consists of these individuals, the whole fungal mat dies; the whole is greater than the sum of the parts and hence is the prophesy for the whole leadership elite fungal mat of the UUUnited (sic) States (individual) of America. \"Until Death Do Us Part\".The question that now begs is how long can the frantic and desperate manipulations of the \"Law(s)\" hold up the economy? My guess is around 6 to 8 more weeks, er or so.Ho humPeterJB

I believe we have reached the \"LOL Moment\".\"CEO of Analog Devices, Jerold Fishman, neither admitted or denied and made a settlement for backdating options for a fine and penalties of $4.5 million. Fishman was not charged with wrongdoing. The SEC’s only function is to collect fines and let the crooks go for paying off. We have two cases where CEO’s wouldn’t cooperate and they ended up in prison. Those who payoff, and are Illuminists, go right on stealing from the public.\"http://www.theinternationalforecaster.com/International_Forecaster_Weekly/The_Impact_of_Endless_LiquidityHo humPeterJB

@PeteCAThe country of Iran has always had the immediate steps at its disposal to completely defuse this crisis. If indeed they were really seeking peaceful atomic energy it would entirely possible to do the following – as early as tomorrow morning:Iran HAS been in compliance. The ONLY way that they could defuse this \"matter\" would be regime change: that was the sole intent behind the illegal invasion of Iraq; it\’s the sole intent behind what will be an illegal invasion of Iran.For more please read:Obama and McCain Are Both Wronghttp://www.fff.org/comment/com0806a.aspMark

The pro-government virus in today’s blog blaming boomer greed for the state of the American economy has the wrong slant, of course. As they say, follow the money. After the big altercation in the middle of the night who went home with a black eye and who went home with the cash? I’m not a boomer but I’m smart enough to know who’s the victim and who’s the thief.If I understand correctly, it was Hank Paulson* who took home $18 billion, not an electrical engineer or a small businessman or a computer programmer. Financial greed is destroying the American economy.The domination of finance over politics and economics has caused widespread imbalances and instability of price levels and is proving disastrous to the American people.The proceeds of the issue of new money belong to the nation where it is issued, or where it is accepted as legal tender, not to the issuer. Herein lies the basic flaw of the existing monetary system.The bankers who lend nothing themselves create money by issuing a loan at interest. This confers on the borrower the power to purchase a corresponding amount of wealth on the market – which wealth does not belong to the issuers, or to those who borrow from them, but to the community.The creation and destruction of money carried on in secret for private gain and the acquisition of power is the real danger that is undermining constituted authority in America. It is a system that gives free rein to human avarice with no regard for the common good and for family life. It has led to the final stage of decay in America – which is realized by the subjugation of real wealth to the manipulation of the exchange-medium or token wealth.*Guest 2008-05-15 05:59:34 “Hank Paulson made 18 Billion dollars this year…by producing or manufacturing absolutely nothing…”

Here’s a take – and it’s always hard to pick just one – on inflation from Alan Abelson’s column on “Fair Game” in the June 2 issue of Barron’s:In its attempt to obscure hard times, Washington can count on the help of Wall Street, or at least the significant portion of it that enjoys singing in the rain without an umbrella, hoping to lift investor spirits – and, just coincidentally, brokerage commissions and positions – by pretending to espy nonexistent rainbows, accompanied, of course, by their obligatory pot of gold.A vivid example of spin is the response to inflation. With gasoline prices now around $4 a gallon and pointed higher, the cost of goods levitating to dauntingly high levels and a passel of other items large and small spiraling upward, inflation is alive and kicking hard – as anyone who fills up his car or wanders into a supermarket knows. But, much like those Krishna kids who used to shuffle the streets decked out in robes and moaning their incantations, a surprising number of economists in the street keep uttering their mantra, “There is no inflation.”By way of proof, they cite a concoction deliberately created by the Federal Reserve under Arthur Burns, seeking to nullify political pressures – and refined several times subsequently – that eliminated food and energy, supposedly because they were too volatile. Which is how some misbegotten monstrosity called “core inflation” was born.It’s also why the core-ists sound so cheerful about current inflation, which might range as high as 11% if it were measured by the more stringent standards in effect before Burns puffed his pipe and ordained the end of food and energy as components of the inflation yardstick. By the core-ists benign reckoning, the present rate is somewhere around 2% and all must be well on the inflation front.Or so it seems to that misguided bunch. But a hot-off-the-presses paper by the research department of the Federal Reserve Bank of Philadelphia finds that, pure and simple, “core inflation is not necessarily the best predictor of total inflation” and, contrary to the conviction of Burns and his spiritual heirs, “food and energy prices are not the most volatile components of inflation.”Which, we feel, is deserving of a polite “Wow!” These conclusions are backed up by pretty exhaustive and somewhat exhausting research findings, adorned by algebraic formulas and a proper smattering of graphs and tables.The core-ists, alas, may just have to change their tune and get real

@Guest: “Nouriel, Looking at all that has happened, including an unexpected sharp rise in food and energy costs, GDP was up 1% (0.2% if you strip out inventory build) last quarter. Will GDP ever drop significantly? How do you reconcile this relatively mild downturn with your stark view of the world?” 2008-06-03 17:02:39I am not Nouriel, but my “stark view of the world” comes from my empty pockets and watching the government and the Fed use inflation to steal the few cents I have remaining. Regular gasoline today is $4.49 a gallon in Carmel, California. Suicides are up, burglaries are up, house evictions are up, bankruptcies are up, fuels costs and food costs are up, unemployment is up, wages are flat… If you can’t see that we are in stark and difficult times, then it’s a waste of time to listen to you. And by the way, what do lying government GDP figures have to do with anything?It’s a little insulting to have before us a brilliant analysis from the professor, complete with supporting evidence, and have it ignored.

Complacency further fading away…Mark Gilbert at Bloomberg:http://www.bloomberg.com/apps/news?pid=20601039&sid=abao965FJY5s&refer=home>“Banking in a fractional reserve, fiat money world is inherently a non-market exercise in legalized deceit,\’\’ says Corrigan at Diapason. “The unfettered finance which it allows is all too prone to wreak a devil-take-the-hindmost havoc once it becomes unanchored from reality and succumbs instead to the intense, positive feedbacks which operate within it on both a systematic and a psychological level.\’\’ It is time to put investment banking back in its box. Treat finance as an end to a means, rather than an end in itself. Encourage our brightest and best to become physicists and biologists, programmers and mathematicians, playwrights and artists, surgeons and architects. Stop glamorizing the conjurors who propagate the confidence trick of banking by magicking shiny coins from behind our ears. Bankers have betrayed Roosevelt\’s “sacred trust.\’\’ Until they redeem themselves, that trust should remain withheld from the finance crowd.In the mean time, I\’m trying to protect my little savings from the greed of all those thieves.If I don\’t succeed, saving won\’t be on my agenda anymore for the rest of my days. Don\’t want to feed the monsters anymore.

@Written by Wild Bill on 2008-06-05 06:06:39We have the ability to produce a material Utopia on this planet. Our exponentially expanding knowledge base built by our ever expanding network of individual ideas will provide solutions to our current dilemmas.I don\’t agree. The reason being is that we have a fixed amount of physical resources and a growing population. Yes, we can have LOTS of ideas, and just like technology, they represent processes, but they shouldn\’t be confused with the physical world.Mark

http://deusexmacc.blogspot.com/

Stress?http://www.glumbert.com/media/crazyoffice

I suggest that many of you will enjoy / benefit from reading my new novel, \"World Made By Hand\" set in America\’s post-oil future.It is a vivid dramatic variation on the themes presented in my previous book \"The Long Emergency.\"I admire the generally high level of discourse on this blog.–James Howard KunstlerSaratoga Springs, NY

@Nouriel: “A contracting economy, falling employment for months now, the worst US housing recession since the Great Depression, collapsing home values, millions of households underwater with an incentive to walk away from their home, a shopped out and saving-less and debt burdened US consumer buffeted by… We were in the eye of the storm rather than past the storm; and the recent events and developments suggest that the worst is ahead of us, for the economy, for equity markets, for credit markets and for money markets.”Less eloquently and accurately, Here it comes, the domino fall: first, the push, from economic toxic waste and below-flood-level interest rates and off-shoring and inflation, then dollar collapse, then credit collapse, then bubble collapse, then houses, then gas, then cars, then eating out and shopping out and entertaining out and remodeling and insurance and services, then jobs, then business failure, then nonpayment, then jobs, then business failure, then nonpayment… Case in point: Pee Wee\’s Grill Failure Touches Roto-Rooter, Bimbo Bakeries, GM Bristol, owner of a Roto-Rooter Inc. franchise in Concord, California, became a victim of the credit crisis last month when Pee Wee Muldoons Bar & Grill in a strip mall 20 miles away filed for bankruptcy protection. “I was going to replace 10 service vehicles this year,\’\’ said Bristol, 67, whose claim for $5,297.75 makes him one of 57 creditors listed in Pee Wee\’s court filings. “Now, with the economy the way it is, I\’m going to hold back. But it seems like everybody on that list is a victim to some degree.\’\’ The pain at places like Pee Wee\’s, in Brentwood, California, 50 miles east of San Francisco, is still ricocheting through the economy. What began with the repackaging of subprime loans into AAA rated securities is unraveling on Main Street, wreaking havoc with businesses and lives far from New York, as house prices continue to fall and foreclosures rise. That, in turn, means more bad news for banks. “We\’re in the eye of the hurricane right now,\’\’ said Paul Kasriel, chief economist at Northern Trust Corp. in Chicago. “We\’ve been through the first wave, and another one\’s coming. We\’re going to see more problems in the financial sector and sluggish growth at best in a number of quarters going forward.\’\’ Meatloaf and Vodka Pee Wee\’s difficulties started in the fall of 2006, when California\’s housing market cooled. Monthly revenue at the restaurant, which serves a community with a large retirement population, fell from $260,000 to $180,000, and then to $100,000, said co-owner Milan Petrovich, 61. He blamed the drop on a surge in foreclosures and rising gasoline prices that discouraged patrons from driving for a night out. “This place would be packed on weekends two or three years ago,\’\’ said Brian Nolte, 43, a regular customer who stopped in for a meatloaf lunch and a double vodka. “Now you\’d be lucky to have eight or 10 people on a Friday night….\’\’ Tightening credit is affecting companies of all sizes. Fairfield, Connecticut-based General Electric Co. said it missed first-quarter profit estimates because of the seizure in credit markets. And in Peabody, Massachusetts, Wet Willy\’s car wash is closing. “People aren\’t buying cars, and they\’re not washing the cars they have,\’\’ said Jordan Shapiro, a lawyer in Malden, Massachusetts, representing Wet Willy\’s. The car wash was one of 2,745 U.S. companies to seek bankruptcy protection this year through June 3, an increase of 33 percent over the same period last year… http://www.bloomberg.com/apps/news?pid=20601109&sid=aE.ZVl8VRPq4&refer=home

The US economy is now credit card driven and supported by the media who puts a positive spin at the end of each negative event.Check any news media reports on housing, go to the bottom and you will see:\" but there are signs that things may have hit the bottom\" or \" But there are some good news\" or \"When the market recovers, home prices will march right back up\" \"cancelations had stabilized a little \"……..

“WASHINGTON (AP) — Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis\’ mounting damage to homeowners and the economy.”But let’s not concern ourselves with the facts… the Dow Jones U.S. Real Estate Index is up today about 2%!!I get it now… Foreclosures are good signs for the real estate market… and all this time I thought they were bad. What the heck was I thinking??

Dear Prof. Roubini,I will never listen to you again. My wealth has been evaporated by listening to you. I am fed up now. When I am out of this market I\’ll be the happiest person on earth.Kind regards.

\"Dear Prof. Roubini,I will never listen to you again. My wealth has been evaporated by listening to you. I am fed up now. When I am out of this market I\’ll be the happiest person on earth.Kind regards\"The professor said cash would be king this year!!

HOLY COW!!!!!MBIA, Ambac Stripped of AAA Insurer Ratings By S&P (Update1) By Christine RichardJune 5 (Bloomberg) — MBIA Inc. and Ambac Financial Group Inc., the world\’s largest bond insurers, had their AAA insurance financial strength rankings cut by Standard & Poor\’s. The ratings were cut two levels to AA, New York-based S&P said in a statement today. S&P said it would keep the ratings under review pending “clarification of ultimate potential losses as well as future business prospects, the outcome of strategic business decisions, and potential regulatory developments.\’\’ More than $1 trillion of municipal bonds and corporate securities the companies guaranteed depend on those top ratings, as does the capacity for New York-based Ambac and Armonk, New York-based MBIA to generate new business. MBIA Chief Executive Officer Jay Brown and Ambac interim CEO Michael Callen were hired last year largely to help the bond insurers maintain their top ratings in the face of potential losses on collateralized debt obligations and other faltering securities they guaranteed. “The rating actions on the companies reflect our belief that these entities will face diminished public finance and structured finance new business flow and declining financial flexibility,\’\’ S&P said in the statement. The cuts follow Moody\’s announcement yesterday that it had placed the two companies\’ ratings under review for a second time this year. MBIA and Ambac executives said they had no plans to try to raise additional capital to salvage the top ratings. The world\’s largest bond insurers raised $4.1 billion in the past six months through the sale of debt and equity in a bid to keep their top ratings. http://www.bloomberg.com/apps/news?pid=20601087&sid=apwRNJVHwpBQ&refer=home

Unemployment is not going up and the farewell checks are doing miracles. There is no doom and gloom. All bullocks. Just making me lose a lot of money. But thanks professor. At least you have a nice job and can tell what you want without any consequences.

The only chance for the good life that savers, and honest stock traders, and homeowners, and wage earners, and retired boomers, and college graduates have is for the economy to pull the rug out from under the money-grubbers.IMO, a stock market held up by savings from old ladies’ bank accounts, sap-sucking inflation, devalued paper, bubbles and the broken backs of wage earners is not self-supporting.

I am thanking the professor very much for providing us with decent and up-to-date information.

I am also very thankful for decent and up-to-date information – if it is right and not completely wrong!!!

About two years after Nouriel started talking about the automotive recession, GM is finally closing plants. MSM media are also starting to recognize that thousands of companies that supply the large auto factories are now in big trouble. Layoffs will start piling up later this year. This will just add to the LBO\’d companies with too much debt (corprate defaults) and the regional bank defaults currently predicted to hit over the next year. the whole process stretches out over a lot of time, as companies and people are rightfully fighting to delay defaults. Don\’t be a day trader based on macro-economic trends.

\"I wonder how much difference we would have had if we have had Professor Roubini in charge of the Fed, instead of Bernanke?\"I don\’t wanna know. Bernanke is at least keeping up the markets whereas Prof. Roubini is talking about doom and gloom and a procrastinated recession. Just wonder how deep this recession will ever become – if at all!!! There is only one complacent person on this board and this is the master himself. How can he publish this very posting? Today has proven he is completely wrong. MBIA and Ambac are downgraded and the so-called complacent financial markets are rallying.

Hi Medic,give me your address and save the bus fare.

@ Guest on 2008-06-05 14:51:05The directions are pretty tough. LOOK OUT! Your shoe is untied.

US economy is NOT sinking!!! Do you see any water entering the ship???

http://www.ft.com/cms/bfba2c48-5588-11dc-b971-0000779fd2ac.html?_i_referralObject=762457760&fromSearch=nMonolines and Lehman…little late, so market goes HO-HUM.

Shock factor of monoline downgrade died in the belabored after-the-fact announcement. Months ago the markets, through swaps and options, showed that the market understood and priced in the feebleness and irrelevance of monolines. That today they finally made it official means everyone already knew and the news would provoke little reaction. Buy on rumour, sell on news! Gotcha!

Thanks for your lecture on timing the market. MBIA and Ambac downgraded. They are toasted but what did the stock market do: MBIA+7%, Ambac +5%. I wouldn\’t call this \"complacency rapidly fading away\". NR was just talking bullocks. Easy as that. Maybe he should talk more about the upcoming war against Iran.

REALLY BIG DEAL!!!From a Roubini post in December:\"Add to this mess the fact that monoliners collectively insure $3,300bn of principal and interest (less than 30% of it ABS) with only a $22bn capital base. Of course a downgrade of monoliners will have a severe knock-on effect of potential downgrade on muni and other bond markets; analysts have estimated that such downgrades could cause losses writedowns of about $200bn. \"Add to this the trillion dollars of municipal bonds which will be downgraded. This is a REALLY BIG DEAL!!!

Hi Gloomy,wouldn\’t be the first time NR is wrong. See this very posting. LOL

@ Guest on 2008-06-05 15:51:38Nouriel isn\’t making this stuff up. One trillion dollars of Muni bonds really are insured by the monolines (see Bloomberg article) and their ratings will automatically decline, causing huge losses as a direct result of these downgrades. Ditto for ABX\’s. Whether the ratings agencies would have the kahunas to downgrade was a matter of speculations. Now that a downgrade has occurred. the consequences are a matter of fact.

@ Wild Bill on 2008-06-05 06:06:39\"We have the ability to produce a material Utopia on this planet. Our exponentially expanding knowledge base built by our ever expanding network of individual ideas will provide solutions to our current dilemmas.\"I totally agree. The human spirit is infinitely unlimited and is must be guided. The problem is that politics always constrains the spirit through ignorance that becomes corrupted and hence a complete violation of the principle of civilization through static dogma and self-agenda (hierarchy).The answer lies in applying what we know as qualitative constraints to the human dilemma that \’men cannot be trusted\’. Therefore we must use our technology where we truly are supreme (and can become more so) upon which to build (unleash our potential)our socio-economic infrastructures 200 years in advance into the future. We cannot anymore, afford to build civilization upon the whims of the political moron, a priori.We will soon be able to create our raw materials as well as and including, tap limitless energy but we must first sort out our fundamental moral and ethical issues and these must be basically automated in technology. This is the most vital and urgent task before humanity today; the rest is easy.PeterJB

@Miss America on 2008-06-05 15:54:39 – looking forward to it sooner rather than later… managed to roll some June to July yesterday and day before thank goodness… not surprised by equity rally just thought it would coincide with oil going down – held onto some short June oil stocks unfortunately as IMHO oil is about to materially \"correct\"… not a very fun day today – however, things get choppy before BIG moves

A little tax lesson (message) hidden in the article, \"Big rally on Wall Street\"http://money.cnn.com/2008/06/05/markets/markets_newyork/index.htm?postversion=2008060516Snippet: “On the upside, \"a lot of people thought consumers were going to have to hoard their checks because they have to pay their mortgage and $4 a gallon for gas,\" Rovelli said. \"So I guess there is some reassurance that the consumer isn\’t dead, at least at the lower end of the retail picture.\" I say wait and see what happens to consumer spending next year, when the tax bill comes due; or, when the consumer needs to save an extra 100 dollar a month to pay increased tax bills accrued in 2008 (because of these rebate checks). You see… the rebates are your money. It\’s really a part of your tax liability for 2008. dollar for dollar, this check you “spend” this year, will impact next years tax liability. Consumers will owe 170 billion more in taxes NEXT YEAR (the total cost of the tax rebate bill – see http://www.cnn.com/2008/POLITICS/02/07/congress.economy/index.html). For people who like to prepay their taxes, you just won\’t get as much next year. it\’s not free money! Example, if I have a $1,000 income tax liability in 2008, then, I owe the US government, $1,000 plus, \"my 2008 rebate check amount.\" If you normally get a $1,000 refund each year, then, the US government will pay you $1,000 less, \"your 2008 rebate check amount.\" What is bad about this program, is that our government is reinforcing a “borrow and spend” mentality. Moral of the story gang, put a little extra money in the kitty, for next years tax liability.

\"Anyone who uses \"limitless\" to describe ANYTHING on a finite planet cannot be taken seriously!\"@ Mark on 2008-06-05 17:23:41I can remember that there was a time when influential men consensually agreed that man would never fly and anyone who said that they could, couldn\’t be taken seriously. Ever seen a 747?Ho humPeterJB

PeterJB: \"I can remember that there was a time when influential men consensually agreed that man would never fly and anyone who said that they could, couldn\’t be taken seriously. Ever seen a 747?\"Yes I have seen a 747, but that is a ludicrously fallacious analogy. Consensus has nothing to do with it, and technical feats have nothing to do with it except insofar as technology may improve adaptation. Here\’s a better analogy. In the finite nature of on-board resources, the Earth is qualitatively no different than the space station. The scale may be vastly differently, leading some people to wild theological notions of inexhaustibility, but resources are still finite. It is true that in the past it has sometimes been falsely predicted that some resource or another would run ou, but that the holy blessed market found new supply. But the fact that resource exhaustion has sometimes been falsely predicted in the past does not mean that all predictions of resource exhaustion are false. We are still a space station, a closed system, and that which is not renewable, or for which no substitute exists, will eventually run out. Some things are finite, and anyone who claims otherwise hasn\’t given much thought to what happens to a 747 when it runs out of fuel.

Written by Miss America on 2008-06-05 15:54:39OF COURSE! And the $/€ too. I love you.

Fed Governors Openly Question Bernanke\’s Competence Open dissent at the Fed continues. I first talked about this a week ago in Infighting At The Fed. Today Lacker Says Fed Loans to Wall Street Risk More Crises.Richmond Federal Reserve Bank President Jeffrey Lacker said the lending to securities firms that the central bank introduced in March may lay the seeds of further financial crises.\"The danger is that the effect of the recent credit extension on the incentives of financial-market participants might induce greater risk taking,\" Lacker said in a speech to the European Economics and Financial Centre in London. That \"in turn could give rise to more frequent crises,\" he said.Lacker urged that the central bank now \"clearly\" set boundaries for its help to financial markets. In an interview yesterday on the themes of his speech, Lacker said even those new boundaries may not be believed by investors unless a financial firm fails \"in a costly way.\"The remarks are the strongest warning by an official about the consequences of the Fed\’s aid to securities dealers, the first lending to nonbanks since the Great Depression. While other regulators have focused on tightening investment-bank oversight in exchange for the lending, Lacker said there\’s a case for \"scaling back\" the new programs.Philadelphia Fed President Charles Plosser urged in a separate speech today that officials specify the conditions \"under which the central bank will lend\" to firms. He told reporters in New York afterwards that \"we run the risk of sowing the seeds of the next crisis.\"Thomas Hoenig of Kansas City said last month the Fed\’s actions were \"likely to weaken market discipline,\" while Minneapolis\’s Gary Stern in April worried about \"adequate incentives to contain\" an expansion in the Fed\’s safety net.The central bank has introduced three programs since December to help counter the credit crisis. Along with the Primary Dealer Credit Facility, the Fed lends Treasuries to dealers in exchange for mortgage and asset-backed debt through the Term Securities Lending Facility. The Term Auction Facility offers cash loans to banks.Lacker indicated skepticism about the value of the programs.\"It isn\’t clear what kind of market failure is being addressed\" with the TAF, he said. Central bankers should be wary \"that they can substitute their own judgment about the fundamental value of financial instruments,\" he said. Bernanke Loses SupportThe seeds of this crisis were sewn by the loosey goosey policies of Greenspan for which there was never a dissent from Bernanke, or that matter anyone else (at least in public). And what started as a minor revolt has now turned into a major question of confidence regarding the anything goes policies of Bernanke. That Congress is holding up votes on Fed nominees is also not helping Bernanke any.If various Fed governors continue openly questioning Bernanke\’s decisions, he is not going to last long as Fed chairman.Mike \"Mish\" Shedlockhttp://globaleconomicanalysis.blogspot.com

@guest who has been posting all day using the word \"bullocks\" – FYI, a bullock is a large bovine creature. The word you\’re looking for is \"bollocks,\" which refers to one\’s buttocks. Oh, and you\’re an idiot.

HAHAHAHAHA HAHAHAHA, moral hazard doesn\’t matter. let the dollar die. let the trade medium, yes currency, die. HAHAHAHAH HAHAHAHA

And while I\’m at it, Ken, CPA – your assertion that the stimulus payments are merely an early payment on next year\’s tax refund is wrong. It has been disproved in these comments previously (another thread) and elsewhere. I refuse to do the legwork to look up the citations again.

Today’s blog discussions concerning the availability of resources as they relate to politics and policy have been interesting. For my part, I think it’s wrong to worry too much about the challenges of politics and population growth in the context of so called “fixed resources” (such as food and energy).Yes, we’re knee deep in political problems at the moment, not the least of which puts our state military and economic control in the hands of corruptible ruling elites. But I believe these problems are fast becoming unacceptable to people of industry and goodwill who know they must be solved for our way-of-life to survive. And so, THEY WILL BE SOLVED. Freedom of action, coupled with representative government rather than controlling government, and a renewed emphasis on a moral, contract society can be contagious again if our self-serving rulers, who feed off the labors of the people, are pushed aside.Ironically, greater freedom not only is the solution to our political and policy problems, it’s also the fixer for our so-called “fixed” quantities of resources. Coal and oil are fixed resources, but not energy. Automobiles are becoming a fixed transportation resource, but not transportation. Because our future resources are unknown, it does not mean they don’t exist.New York City in 1800, population 30,000, began to double its population every 10 years. But as Columbia University’s David Rosner explains, the city was fast growing something else besides people. Horses. Between 100.000 and 200,000 horses (mostly draft horses at work on the streets every day) lived in New York at any given time. And each, writes Rosner, provided an average of 24 pounds of manure and several quarts of urine every day. Transportation problem? Yes, but try cholera, typhoid, typhus, yellow fever and more. Who, crossing through the steaming muck and dodging the teams on a busy Manhattan street in those days, could have forecast today’s whoosh of subways and flash of Yellow Cabs?How many field laborers a generation ago, swathing and stacking wheat by hand, could imagine their grandchildren driving self-propelled combines to produce flows of clean grain so fast that only large trucks could keep up with their speed in the field? Many combines would carry the name McCormick because young Cyrus McCormick had put skill and years of hard work and late nights into the invention of his machine, the harvester, because he knew his patent would be protected. His industry paid off and he became rich, famous and influential. It’s wrong to put a limit on what the future can bring if a man’s free activity is protected by government, and not managed by government.Man’s visit to the moon was forecast centuries ago. In the end it was accomplished as a government project with tremendous input and benefits for business. But it should be noted that while the ancients believed we might make it to the moon, not one suggested that the rest of us would be able to watch it on television from our living rooms.I sincerely believe that we put too much emphasis on the concept of “fixed resources,” but not enough on allowing man to reach his full potential by restricting government from sapping his energy and achievements.

Listen to this: \"Investors who followed the advice of analysts who say when to buy and sell shares of brokerage firms and banks lost 17 percent in the past year, twice the decline of the Standard & Poor\’s 500 Index.\" \"Buying shares on the advice of Merrill Lynch & Co.\’s Guy Moszkowski, the top-ranked brokerage analyst in Institutional Investor\’s annual survey, cost investors 17 percent, according to data compiled by Bloomberg. Deutsche Bank AG analyst Michael Mayo\’s counsel to purchase New York-based Lehman Brothers Holdings Inc. lost 59 percent. Citigroup Inc.\’s Prashant Bhatia still rates Merrill “buy\’\’ after its 56 percent retreat from a January 2007 record.\" http://www.bloomberg.com/apps/news?pid=20601087&sid=aTuI17bC.igE&refer=home Hey, these are top analysts who move the markets. And then we come here to blame Professor Roubini, although he never issued any \’buy, hold or sell\’ advices. From \’RGE Monitor Web Logs Terms of Use\’ above. \"The information on this site is provided for discussion purposes only, and is not investing recommendation. Under no circumstances does this information represent a recommendation to buy or sell securities.\"Be responsible for your own decisions!

@Written by Guest on 2008-06-05 23:27:55Ironically, greater freedom not only is the solution to our political and policy problems, it’s also the fixer for our so-called “fixed” quantities of resources. Coal and oil are fixed resources, but not energy. Automobiles are becoming a fixed transportation resource, but not transportation. Because our future resources are unknown, it does not mean they don’t exist.Energy IS fixed, what was embodied in the earth and what is transmitted from the sun. How energy is harvested IS fixed.Transportation IS fixed. It\’s controlled by the physical world; and until otherwise, such as \"physical projection,\" which is still a ways off of the final testing phase, it will remain ever so.Regarding \"future resources,\" are you suggesting that we\’ve yet to discover unknown elements? Otherwise, you\’re talking the application of a technological process against existing/known physical elements.Man’s visit to the moon was forecast centuries ago. In the end it was accomplished as a government project with tremendous input and benefits for business. But it should be noted that while the ancients believed we might make it to the moon, not one suggested that the rest of us would be able to watch it on television from our living rooms.Well, there you go, the fact that we could watch an event on TV is the defining measure of success! NOTE: and by now the remnants of those old TV are in landfills in impoverished lands oozing death on to the locals. But, how many people have made it to the moon? There\’s an issue of scalability here that you\’re overlooking. Additionally, what makes you so certain that the moon shot was a good investment? Have you or anyone else that you know performed any analysis on opportunity cost? Technology as applied to the civilian sector is second-thought at best (through the lower class a bone for their \"investment\"). Further, when talking anything space related keep in mind that THE goal is militarization/control of space, not some idealistic \"for the good of the consumer\" reason: NASA was, and continues to be an extension of the US military arm (do some research on the history of NASA).And about \"greater freedom,\" scroll down and read the exchange between Bill Moyers and Isaac Asimov: http://globalpublicmedia.com/transcripts/645For laughs I recommend that people read the comments on/about Dr Julian Simon in the same (above) article.In general there seems to be a significant dichotomy in your argument, on one hand you\’re saying that government should get out of the way, but on the other you\’re selectively saying that it should get involved. Well, we\’re seeing, in all it\’s glory, the result of business and innovation and government working together- Iraq. Moon rocks, dumping depleted uranium in the desert… I can hardly wait to see what unbridled minds and inexhaustible resources bring us next! And meanwhile the majority of the world\’s (ever-increasing) population survives on $3 or less per day…MarkP.S. All my arguments are null and void should we experience an intervention by aliens from outer space; and doubly so if Elvis Presley happens to return with them

re: Written by Mark on 2008-06-06 03:28:58while i agree with your point about the guest and his/her dichotomy in their argument i disagree about your notion that energy is fixed. Let\’s take the example of the sun (it\’s the easiest one as i have not much time): \"Energy IS fixed, what was embodied in the earth and what is transmitted from the sun. How energy is harvested IS fixed.\" That is a most uninformed statement. The exponential advances in solar panel technology completely nullify your argument, not to mention the power/radiation/intensity of the sun has been increasing of late. \"Regarding \"future resources,\" are you suggesting that we\’ve yet to discover unknown elements? Otherwise, you\’re talking the application of a technological process against existing/known physical elements.\" Another inane comment — remember Malthus and his doomsday predictions that never came to be? We discover technology that in turn exploits said resources, and thus we are in fact rediscovering \"future resources\" all the time.