Wednesday, January 25, 2012

January 25 2012: Occupy Your Own Space


Dorothea Lange PlantationJune 1937
"Wife and child of tractor driver. Aldridge Plantation, Mississippi"


Ilargi: For today’s global financial problems, there are no solutions that are favorable to either incumbent politicians or wannabe leaders (unless they’re extremists, perhaps), let alone to the people they claim to represent. All our herd of leaders can do is to postpone the inevitable outcome of inevitable processes as long as possible.

That's why we see Obama presenting yet another housing plan that won't work, and Europe setting up the umptieth Save Greece concoction that is doomed to fail before it's signed - if that happens at all -. Obama knows it, and so do Europe's leaders.

The disaster they're seeking to avert, it seems, is not so much economic depression as it is their being voted out of office. And this pattern is not going to change, not as long as they can keep up appearances by seizing ever more of our children's future wealth, not as long as we let them.

Greece is negotiating a deal with investors to achieve a 70% haircut on existing bonds, up from 21% hardly more than half a year ago, and it still won't be enough. The 49% increase since last summer should be a huge red flag for everyone.

Why that increase? Well, first of all of course because 21% was always ridiculously low. But something else is happening too: the biggest developing problem for Europe is that a Greek default can increasingly be enormously profitable for certain parties in the market. And why should they then work to "save" Greece?

It has been clear for a long time now that Greek bonds have no value left at all. During that time, the smarter kids in the class have been able to position themselves according to that fact. Therefore the noose around the EU and ECB necks gets pulled in tighter as we go along. And as the ridiculous notion of the 70% haircut being labeled as "voluntary" keeps being touted.

The IMF is pressuring the ECB to also take a haircut. Other central banks and sovereigns are next in line. Hello, Fed! Hey, China! The ECB wants to sell its Greek paper to one of the European emergency funds, which can then take the haircut. Musical chairs is making a come-back as a highly popular game these days.

The smarter kids are laughing all the way to all the banks as they are paid all the money they want by all the bankrupt nations seeking to hide their insolvency from their own citizens, squandering those very citizens' scarce remaining wealth in the process.

We can only keep our societies alive and running by telling a seemingly neverending series of lies. And if everyone had the same interests, this delusion could last quite a while; we’ve been doing it for 4-5 years already, after all (and arguably for much longer). But not everybody has the same interests, not anymore.

This lying eyes mirage system is almost perfect, but, in the words of Leonard Cohen: "there's a crack in everything; that's how the light gets in". Still, people believe most of the lies, and add their own with impunity, because they don't want to see things for what they are. So we just keep talking about economic growth, and we'll make up the numbers we need to prove it as we go along.

The plans discussed for Greece involve interest payments on new bonds of 4-5% or so. It doesn't matter one bit what percentage they come up with. Greece won’t be able to pay any interest, never mind principal, for many years to come. And everybody with a seat at the table knows it. These are your proverbial exercises in futility. They're all that's left us.

Financially bankrupt, politically bankrupt, morally bankrupt. As every additional dollar issued as debt no longer adds to GDP, but instead subtracts from it, there's no doubt where this is going. But yes, it's true, we can still choose to look the other way and wait for it to hit us over the head. Matter of preference.

If houses in countries like the US, Britain, Holland, Spain, China are ever to reach a level where they become affordable, we will find they no longer are, no matter how low prices become - receding horizons in reverse, sort of -. Because if they do reach that level, the entire contraption that is our economy will have crumbled.

So governments choose to prop up home prices. Helped in arriving at that decision by the knowledge that homeowners are a formidable political force they don’t want to turn against them. But propping up home prices means supporting price levels that were established by hot air credit in combination with liar loans and other "criminal legalities" in the first decade of the millennium.

The hot air credit is rapidly vanishing because it's put everyone and their pet hamster neck deep into debt. People can't afford to borrow anymore, a simple truth that is almost entirely ignored. Hence, to prop up today's prices at yesterday's levels, governments themselves need to step in. Can't have that ole market working its magic. What this does is it lets every single citizen pay for every single underwater homeowner's debt. And why should people who already have a hard time pay for someone else's home?

Obama's State of the Union mortgage plan, provided it doesn't simmer down and die like all the preceding plans, is based on refinancing at lower interest rates. If nothing else, this will put potentially substantial ($100 billion? $300 billion?) additional pressure on Fannie and Freddie. Which already have negative capitalization rates. And sit on trillions of dollars "worth" of highly dubious paper, most of which has not been written down to anything like reasonable, realistic levels.

Of course all the negative aspects of this were dealt with a few years back through the brilliant move to let everyone decide their own accounting standards. A move that is as dangerous as it is brilliant, however. Because nobody knows what anything is truly worth anymore. You can have lender A having a home loan on its books for $200,000, while bank B has issued securities for a strikingly similar home next door "worth" $400,000, and the just as similar home next to that one has been sold for $50,000 just last week.

Now if the "owners" of either the first or the second home default, what happens to the value of those loans and/or securities written on them? At some point, someone will demand to know the truth. But neither the government, nor the lenders, nor the borrowers want that truth to be known. Small wonder that banks would rather let homes sit empty or let borrowers stay put for years without paying. Price discovery is a bitch, and never more so than after a long period of lying about that price.

There's only one thing a government can reasonably do when faced with a conundrum such as this: nothing. Unfortunately, that's not what governments think they're for, doing nothing, and - luckily for them - neither does the majority of people they represent. In this particular case, all those homeowners want action. They demand that the government protect the value of - what they see as- their property. And so we have another plan.

America likes to tout its status of a free market country. But that's just nuts. Delusional nuts. And no, it's not that all of a sudden we see socialism or communism, popular as those accusations may be; that just comes from people who don't understand what those words mean.

What has happened is that America is electing a Liar-in-Chief every four years. His/her job is to keep the herd in the faith, to let them buy stuff all the time, preferably with borrowed money. To keep all noses pointing in the same direction, namely perpetual growth, especially when there isn't any.

The Liar-in-Chief is far more a religious leader than a political one. You can't have the herd disperse and separate and all its members running off in different direction to go and do their own thing. Nothing to do with Obama specifically either, it's simply in the job description. Taking the job, though, is indeed his own responsibility.

If Obama were a political instead of a faith-based leader, he would take his hands off the US real estate market, and let the market do what it does best: price discovery. Shut down Fannie and Freddie and their ilk, the biggest economic disaster in US history, and sell off their "assets" to the highest bidder. Write down all the losses, let holders of loans and securities take the haircuts they are entitled to, and go on with life. Look at the future instead of being stuck in the past.

There is zero chance that US home prices will ever reach their recent peak again, unless some sort of huge inflation were to take place, and that is obviously not in the cards for many years (if it were, it would have been here already) . So before that happens, other factors will have made sure that home prices are driven down relentlessly. Like, for instance, most Americans, or the ones that have jobs at least, a select group, making the kinds of wages that are current today among burgerflippers in China or Vietnam.

Fannie and Freddie are to a significant extent responsible for the fact that the financial sector has been able to take over and govern US society, including its political sphere. Whenever I say things like this, there are always people that point to all the good the GSEs have done: allowed ordinary people to afford a home etc. But in fact, from the get-go, they have driven up prices by "raising affordability", and that has allowed for the banking sector to get a stranglehold on the US population.

Today this has culminated in a situation where personal debt levels and federal debt levels have reached ridiculous levels. Debts which will never ever be serviced. All that's left is trying to let people continue to believe that they will, until creditors bring down the guillotine. Which they will, simply because there's a profit to be made.

Releasing Fannie and Freddie from their misery would amount to certain election defeat, or so goes the perceived wisdom. So that's not going to happen. We're going to have to wait for the markets to judge that the time has come when profits from wagers are more attractive than hand-outs and bail-outs. At that point, governments and central banks will be exposed as being absolutely powerless to influence anything at all, and least of all interest rates or home prices.

And that is a sad reality. For all of us who don't have seats at the big casino tables in Washington and Brussels and Davos.

It's not like I'm alone in my judgment of Fannie and Freddie, even if that's a small consolation in view of the enormity of the consequences of the decision to let an election victory prevail over the health of an economy. If you ever wonder what kind of person wants a job like POTUS anyway, keep that in mind.

Mike Mish Shedlock is one of the few people I know who shares - some of - my views. He had this to say last week:

Time To Concede Home 'Ownership' Is A Fraud
I have long-stated the best thing to do is nothing. Indeed if nothing is done, home prices will drop low enough that investors will want to buy them. Delays in foreclosures only serve to delay the housing recovery. 


Ilargi: Mish then quotes his friend BC, who provides a very astute observation:

The only long-term durable solution to the unreal estate mess is to cease further securitization by agencies and shut them down.

It's time to concede that "homeownership" is a fraud.

When there is $16 trillion in mortgage and consumer debt outstanding and an estimated $16 trillion in residential unreal estate value, with the risk of another 20% decline in prices, there is no "ownership".

Rather, virtually everyone with a mortgage is renting debt-money from a lender and leasing the land from a local taxing authority. The mortgagees have a "dead pledge" in the value of the debt owed, not an "asset". The lenders and taxing authorities are the "owners" of a lien (a bond or constraint on the real property), which entitles them to income in the form of compounding interest and tax receipts in perpetuity. 


Ilargi: Well, it’s not going to happen on a voluntary basis, this admission of fraud. We're going to see the financial markets having to tear the delusion of ownership and economic recovery from the cold dead hands of all those implicated in that fraud, from lenders to investors to borrowers and governments. And that will be a pleasant. sight to behold.

George Soros is in his eighties. He seems to now feel free to speak out on what he sees coming, to hold his cards a little less close to his chest. Soros is dead on, and, if anything, holding back in this Daily Beast piece.

George Soros on the Coming U.S. Class War
"We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system."

Soros draws on his past to argue that the global economic crisis is as significant, and unpredictable, as the end of communism. "The collapse of the Soviet system was a pretty extraordinary event, and we are currently experiencing something similar in the developed world, without fully realizing what’s happening."

To Soros, the spectacular debunking of the credo of efficient markets—the notion that markets are rational and can regulate themselves to avert disaster—"is comparable to the collapse of Marxism as a political system. The prevailing interpretation has turned out to be very misleading. It assumes perfect knowledge, which is very far removed from reality. We need to move from the Age of Reason to the Age of Fallibility in order to have a proper understanding of the problems."

Take Europe. He’s now convinced that "if you have a disorderly collapse of the euro, you have the danger of a revival of the political conflicts that have torn Europe apart over the centuries—an extreme form of nationalism, which manifests itself in xenophobia, the exclusion of foreigners and ethnic groups. In Hitler’s time, that was focused on the Jews. Today, you have that with the Gypsies, the Roma, which is a small minority, and also, of course, Muslim immigrants."

As anger rises, riots on the streets of American cities are inevitable. "Yes, yes, yes," he says, almost gleefully. The response to the unrest could be more damaging than the violence itself. "It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States."


Ilargi: Ironically and unfortunately, the economic growth faith delusion is too strong to make people, even if they acknowledge that harder times lie ahead, understand that they need to focus some place other than how much their gold is worth today, or their pension. That things other than monetary items will be much more important to their survival and well-being.

That land and community and practical skills will in the future trump all the things they've ever seen as valuable. And, to be honest, how can you be expected to change your myopic points of view when everyone around you holds on to them in the exact same way that you do? You look around, and everything seems alright, nothing a spoonful of austerity and hard work can't cure.

But, just as the only good thing to do for Obama right now is to abolish Fannie and Freddie and Sallie Mae and the FHA and FHFA, to get out, which he won’t, there's an equivalent for Jill and Jack on Main Street. And that is also to get out. Get out and cut, to the extent possible, all dependence on the government that makes its decisions for all the wrong reasons, and on all other top-down systems that rely on it.

Because those systems are going to crash, and there's no doubt that they will bring all the Jack and Jills that depend on them, down with them. Obama and Merkel won't get out of the way, and that increases the urgency for Jack and Jill to do so.

There are people whose role in this unfolding tragedy will be to Occupy Wall Street or Tahrir Square. And there are people whose role it will be to find and occupy their own space. Those are the only main roles that will be available for this movie. The extras will all be cast as cannon fodder.





Nicole Foss - Question and Answer, January 2012










95 comments:

SteveB said...

Gravity,

Determining value is overrated. We live, we do stuff, we die. All the money-related (i.e., value-related) stuff we do displaces a lot of other things we might otherwise do in that time. If part of those other things include doing a little extra for someone else, is that really a bad thing? Note that we're not talking about avoidable exploitation here. Fool me once, shame on you, etc. Common sense, laws, government, friends—if we ended the use of money, we would still have allies against exploitation of even the lesser sort.

AllGood4All said...
This comment has been removed by the author.
Ash said...

re: Fed announcement, market up-swing and relentless QE3 pundits

Are these people serious? The Fed did absolutely nothing unexpected, except to those who have no clue (which, granted, is still many gamblers in the market). Low rates until 2014? Try this prediction on for size - low rates until the Fed no longer exists! Hints at QE3 in a few months? The Fed has always thrown in statements that "hint" at further QE and leave that door open - how could it not?? Is gold telling us something about imminent "money printing"? Yes, it is telling us that the level of dependence/complacency in the markets, which believe the Fed is both able and willing to monetize enough debt to make a difference, has reached previously unfathomable levels.

--- said...

Oops, fell off the cliff on the last thread, pardon...

In the spend-your-obsidian-anywhere department, it occurs to me that nothing ever changed. Money is but an illusion for those lower down the economic food chain. The managers still trade in things like metals (and no I don't intend to throw fresh bait to the gold thang)

""Depopulation should be the highest priority of foreign policy towards the third world," Kissinger said, "because the US economy will require large and increasing amounts of minerals from abroad, especially from less developed countries.”

This has the link for National Security Memo 200 mentioned by El G upthread which he felt too "lazy" to look up - http://www.informationclearinghouse.info/article18914.htm

sevenleagueboots said...

We are there - I've seen the future, brother:
it is murder. As in an eye for an eye. Play it at my funeral.

NZSanctuary said...

NZ courts have denied Kim.com bail. He is being held in custody for a month before his next hearing. All his assets have been seized. His company has been broken. This is all based on the ALLEGATION of copy-right infringement. From a foreign government.

The world police state continues to stretch out and gently test its boundaries.


el gallinazo said...
Greenpa
And the recent "discovery" of dark matter and dark energy are not helping matters any. Einstein discovered initially that the energy contained in the vacuum of space in a virtual form was vastly greater than other forms totaled.


You mean, the "invention", not "discovery".

Start from the premise that most of the Baryonic matter of the universe is plasma, and such fictional entities are laughably silly. It is sad that so many billions of taxpayer and research money goes into such ptolemaic "study".

The fact that such fictional entities are taken seriously is a symptom of several things: the status quo inertia of peer review science, ego/career considerations, an over-emphasis of deductivism, and perhaps most importantly - the lack of cross-discipline study within the sciences.

umaperegrina said...

AllGood4All
Regarding your questions about safety deposit boxes, savings accounts, and Treasury Direct. These things have been covered several times throughout the comments section, and I would suggest you do a search for terms (both in the lead article by Stoneleigh, Ilargi, or Ash and in the comments section) in the last several weeks of postings here at TAE. I’ll just make a couple of points here and I’m sure any errors will be corrected by someone more knowledgeable.

Anything you have in a bank account is technically on loan to the bank. You can do due diligence to see which banks have the highest ratings (for example see Weiss ratings http://www.thestreet.com/bank-safety/), but just as money invested in a corporation can be lost if/when that corporation goes bankrupt, your “loan” to the bank can go poof. So far the FDIC has backstopped bank failures, but many people believe that institution will be overwhelmed by system-wide failures.

Robert Prechter (www.elliottwave.com) believes that many banks are going to go under in the next few years, but those banks that are strong might actually get even stronger. He lists the two strongest banks in each state in his book “Conquering the Crash.” In spite of that, however, his advice is very similar to that of this site. He recommends liquidating as many of one’s assets as possible and keeping everything in cash - either physical cash or cash equivalents – which means short-term Treasury Bills. Again, the ins and outs of using www.treasurydirect.gov have been discussed quite thoroughly at TAE and it would be worth your time to track down those conversations. There have been lots of clever suggestions for how to secure physical cash here at this site – and if you don’t find suggestions that trip your trigger here at TAE just google.

Safety deposit boxes seem to be the least attractive option. In the past there have been instances of contents being seized, openings overseen by FBI, etc. Recently, the Dept of Homeland Security has put banks on notice that those boxes can be opened without owner permission or even notification.

Hope this helps.

Timothy Lee said...

I have been interested in current events and studying history since 1969. On January 3, 2012 I went to Madison Wisconsin to hear Nicole Foss speak. A couple of people at work wanted to know what she had to say, so I gave them a short synopsis. Only one person could actually believe that we are not being told the truth about what is taking place. The vast majority of people know something is wrong, but when it comes down to it, denial always wins. As long as Dancing With The Stars, NFL Football, American Idol, and other meaningless "reality" shows come on, then all is well. It is as though I were living in a make-belive world, or on an island all by myself. Most people will agree that you should not trust the Governments anymore, yet, they believe whatever the government tells them about the economy or anything else. I've gotten to the point where I just shake my head and walk away rather than say anything. We have entered another Dark Age - despite all the information that is out there. The current generation has had it better than probably any generation in existance - several decades without anything like a World War, Spanish Flu epidemic, or Great Depression. People no longer believe that anything catastrophic could occure. Catastrophic historic events are on the horizen again, just like they have been for past generations. History can be a cruel mistress, and she has not fallen asleep - even if we have.

ben said...

(brought forward from previous thread)

hey ash,

"how so?" (does greenpa's point stand about flocking)

I guess I felt like you were countering with what appears to be an attempt to mitigate a sensationalist article that seems to rely on a basic type of pattern recognition for its premise. the preposterous title of the article and the feeble opening and closing paragraphs, for starters, stand in contrast with your mitigation that the article isn't making esoteric claims.

this wikipedia entry strikes me as much more reality based:

http://en.m.wikipedia.org/w/index.php?title=Swarm_behaviour&mobileaction=view_normal_site

Wandering Sage said...

And so it begins…2012 has arrived and, whether there is some prophetic galactic convergence on the winter solstice in December or not, change is upon us. There has been a fundamental shift in the world that we can no longer turn a blind eye to. It is starting to affect the daily lives of more and more people. The circus-like distractions of the mainstream media are no longer able to divert our attention from what is happening. The basic tenets of fairness and rule of law have been broken by greed and selfishness. Free market Capitalism is failing, the climate is a wreck, and the already-scarce resources of the planet are shrinking every day. Hubris and fear threaten to tip the world into chaos. The world is much in need of correcting.

There is an old Chinese proverb that states if you want to correct the world, correct the state; if you want to correct the state, correct the family; if you want to correct the family, correct yourself.

It is time to correct yourself. It is the only way you are going to make it through this. You can no longer live in distraction and fear. You must now turn towards what is good, and right and just. This means taking responsibility for yourself and owning what is yours. It means you must start working on being present in every moment of every day and maintaining balance along your path.

Staying present can be a challenge for yogis who live in the mountains and meditate every day. For the rest of us in today’s crazy world it is downright impossible. But we must now do the impossible if we want to avoid the inevitable. Yes, there is too much going on and it may often feel like you are one inch from the edge, however, if you are to continue on this journey and bring peace, love and light into the world, staying present is vital. Staying present provides a solid ground from which to focus on difficulties as they arise. It is a way to take control of things and get your life in order. It is no longer an option to spend your time distracting yourself as you try to escape from being present.

wishing you much peaceAnd so it begins2012 has arrived and, whether there is some prophetic galactic convergence on the winter solstice in December or not, change is upon us. There has been a fundamental shift in the world that we can no longer turn a blind eye to. It is starting to affect the daily lives of more and more people. The circus-like distractions of the mainstream media are no longer able to divert our attention from what is happening. The basic tenets of fairness and rule of law have been broken by greed and selfishness. Free market Capitalism is failing, the climate is a wreck, and the already-scarce resources of the planet are shrinking every day. Hubris and fear threaten to tip the world into chaos. The world is much in need of correcting.

There is an old Chinese proverb that states if you want to correct the world, correct the state; if you want to correct the state, correct the family; if you want to correct the family, correct yourself.

It is time to correct yourself. It is the only way you are going to make it through this. You can no longer live in distraction and fear. You must now turn towards what is good, and right and just. This means taking responsibility for yourself and owning what is yours. It means you must start working on being present in every moment of every day and maintaining balance along your path.

Staying present can be a challenge for yogis who live in the mountains and meditate every day. For the rest of us in today

snuffy said...

I am fairly close to believing that there will have to be some sort of triggering black swan event that stops our "managers"[politicians]from using their creativity to kick the can "just a bit further".
Another group of citizens will get thrown under the bus...and we will continue lurching down the road...until some event,[probably already planned]does the controlled demolition of our society.Maybe a war with Iran,or China. perhaps both....

I don't know if we will not see too much happen this year,as spooking the electorate could have unintended consequence,for either side.
The one real wild card I see for sure is the OWS.Its resting up, organizing quietly...and will make the election season"interesting".
I think there is too much of a chance of people seeing though whatever BS gets tossed in the air.Folks are getting hungry,and mean,and are paying close attention to the mouth-movements of the political class now.Much more than usual.

My best guess is O-man squeaking by...or land sliding...depending on how mean and low this election gets.Gingrich fights dirty.

I could have forecast what happened to Romneny.Born-again types,the base of the repugs now,don't like/trust LDS.It is a doctrine thing.Gingrich,the serial adulterer,with deep ties to everything Washington,fredimac and fanny,ect...is pure evil...but says "I am redeemed/forgiven"...and slides.The same folks who have deep reservations about Romeney believe in forgiveness and that one can be changed.

Once again,we get the choice of bad or worse,depending on which "side"of the party wins.

I dont know what will be the trigger ,but,I do know,we are walking on a razor now,Like the clown with a dozen plates spinning on a stick.He will keep adding plates till there is one too many...


Bee good,or
Bee careful


snuffy

umaperegrina said...

Hmmm...seems that blogger ate my post so I'm trying again. My apologies if it appears twice.

AllGood4All
Regarding your questions about safety deposit boxes, savings accounts, and Treasury Direct. These things have been covered several times throughout the comments section, and I would suggest you do a search for terms (both in the lead article by Stoneleigh, Ilargi, or Ash and in the comments section) in the last several weeks of postings here at TAE. I’ll just make a couple of points here and I’m sure any errors will be corrected by someone more knowledgeable.

Anything you have in a bank account is technically on loan to the bank. You can do due diligence to see which banks have the highest ratings (for example see Weiss ratings http://www.thestreet.com/bank-safety/), but just as money invested in a corporation can be lost if/when that corporation goes bankrupt, your “loan” to the bank can go poof. So far the FDIC has backstopped bank failures, but many people believe that institution will be overwhelmed by system-wide failures.

Robert Prechter (www.elliottwave.com) believes that many banks are going to go under in the next few years, but those banks that are strong might actually get even stronger. He lists the two strongest banks in each state in his book “Conquering the Crash.” In spite of that, however, his advice is very similar to that of this site. He recommends liquidating as many of one’s assets as possible and keeping everything in cash - either physical cash or cash equivalents – which means short-term Treasury Bills. Again, the ins and outs of using www.treasurydirect.gov have been discussed quite thoroughly at TAE and it would be worth your time to track down those conversations. There have been lots of clever suggestions for how to secure physical cash here at this site – and if you don’t find suggestions that trip your trigger here at TAE just google.

Safety deposit boxes seem to be the least attractive option. In the past there have been instances of contents being seized, openings overseen by FBI, etc. Recently, the Dept of Homeland Security has put banks on notice that those boxes can be opened without owner permission or even notification.

Hope this helps.

Joel Caris said...

Yes, thank you, Illargi! I love this post, and it was helpful to have a bit more detail about our economic reality to back up these thoughts, which I've been having.

I'm getting out now and determined to do it as quickly as possible. Working on two farms, gardening, homesteading, paying off my credit card debt, creating relationships and burrowing down into my community. That seems like the most effective thing for me to do, especially considering I'm not as prone to rabble rousing in the streets as some are (though I did attend a few Occupy events back in the fall.)

I'm about to start a series on voluntary poverty over on my blog and this post is helping me to sharpen and clarify the intro to that. Thank you again.

This also left me wondering if there might actually be some point in the future when I'll be able to afford a bit of land without taking on debt, if prices do indeed take a dramatic nose dive. I'm not counting on it, but it would be nice. My plans don't depend on it, though, so I'll just see what comes.

Tax Revolt said...

I entered the search term "treasurydirect" in TAE's search widget and received an error from Google "Your client does not have permission to get URL [very long URL]."

Does anyone have direct links to some TAE comments that discuss TreasuryDirect? I for one would greatly appreciate them.

Ash said...

Ben,

This whole discussion initially started when someone mentioned JHK's piece on "murmuration". I was also skeptical of his description that it involved "unknown cognitive processes", but I remembered reading something about the intersection of critical systems theory and flocks of birds, and thought that may have been what they were referring to. But like I said, I have no idea whether there is any credible or extensive data to back that up and I trust evolutionary biologists, such as Greenpa, to have a much better idea.

Regarding the article that I googled, it was not the source I was looking for, but it made the same connection. Whether or not it was accurate (and I agree it was a bit sensationalist and under-whelming), I do not believe describing the collective behavior of biological systems (i.e. a starling flock) as a function of "criticality" in complex systems is the equivalent of making a claim outside the realm of science or biology . Systems biology is certainly a well-established field, although I'm sure this particular aspect of it is very new and under-developed.

http://en.wikipedia.org/wiki/Systems_biology

* As a paradigm, usually defined in antithesis to the so-called reductionist paradigm (biological organisation), although fully consistent with the scientific method. The distinction between the two paradigms is referred to in these quotations:

"The reductionist approach has successfully identified most of the components and many of the interactions but, unfortunately, offers no convincing concepts or methods to understand how system properties emerge...the pluralism of causes and effects in biological networks is better addressed by observing, through quantitative measures, multiple components simultaneously and by rigorous data integration with mathematical models" Sauer et al[4]

"Systems biology...is about putting together rather than taking apart, integration rather than reduction. It requires that we develop ways of thinking about integration that are as rigorous as our reductionist programmes, but different....It means changing our philosophy, in the full sense of the term" Denis Noble

jal said...

Is this where you searched for comments in the automatic earth?

http://pleasemessageme.co.uk/cgi-bin/blog.dll/d1

Ruben said...

Victoria BC, Stoneleigh speaks at Fernwood U on January 31.

I was happily surprised to see the listing, but it is not updated on the website. If you are in Victoria, it will be great to see you there.

Mark K said...

Exclusive TV series hosted by Julian Assange to premiere on RT in March

http://rt.com/news/julian-assange-rt-exclusive-617/

The Eco School said...

We have, do, and will occupy our place under a strong model of sustainability: http://www.ecothriftydoup.blogspot.com/2011/11/occupy-arawa-place.html

Nassim said...

Tax Direct,

I tried
site:theautomaticearth.blogspot.com treasurydirect
in Google and got 91 hits.

and for
site:theautomaticearth.blogspot.com "treasury direct"
I got 50 hits

ben said...

ash, thanks - flocking certainly appears to be an emergent phenomenon within a complex adaptive system, but i get the impression that criticality just doesn't fit the bill. it could well be that I just don't get it.

http://en.wikipedia.org/w/index.php?title=Complex_adaptive_system

http://en.wikipedia.org/w/index.php?title=Self-organized_criticality

Ilargi said...

Added 3-part video to the post, Nicole Foss - Question and Answer, January 2012. Michigan.



.

Unknown said...

There are a lot of preppers out there who have seen the writing on the wall and have adopted the Mormons's stricture to set aside food and supplies. Some have taken it further to living self sufficiently off of the land. These people will survive the future barring any unforeseen natural or man made disaster. Lot's of good information at prepper websites. Most are not affiliated with the Aryan race mentality.

el gallinazo said...

NZSanctuary

I will easily grant that the terms "dark energy" and "dark matter" are "invented" catch all terms to describe without any form of explanation with previous theory certain astronomical observations and ensuing calculations. Dark Energy is a pointer to the apparent observation that the expansion of the universe, to everyone's surprise, is accelerating. Since the four known forces in the universe would result in a deceleration, an unknown energy applying an unknown force was hypothesized. In the case of dark matter, this term was invented to explain observations of galactic movements which would appear to necessitate far more matter existing than could be explained by traditional matter, which will absorb and emit photons when undergoing known changes of quantum energy state and make themselves observable through electromagnetic energy emissions or absorptions. Of course you know all this, but since this is an open forum, I am laying it out, as they would say on their Word of the Day in Capital Account, for our very smart but perhaps not expert viewers.

First, I might add that the vehemence of certainty with which you express your opinions in this murky area strikes me as strange. In my opinion, the only way one may logically assert that some "new" form of energy is not resulting in the acceleration of the expansion of the universe, is to assert that the observations and resulting calculations of this acceleration are bogus and flawed. I would be quite interested if you could supply links that detail the reasons for this bogosity. I am certainly open minded toward viewing a debunking of this position if valid. Thanks.

el gallinazo said...

umaperegrina

As one might expect, your summary on the area of safer money was superb. I might add the following. IMO, for the next few years the primary danger to holding your savings in short term debt in td.gov is that the federal government, either State, Treasury, or the Dept. of Homeland Insecurity might choose to label you a terraist and steal your money. OTOH, they are now "legally" entitled to aim a $90k Hellfire missile at your head first, so you might not care. This danger is greater for large mouth bass of the internet such as myself. The other, lesser danger is that one needs a corresponding registered bank, in belly down condition, to extract one's funds when needed. There also may be a danger of capital controls, but I don't think the Department of the Treasury will mess with this much as it would send money fleeing from Treasury debt. I do expect some form of capital export controls eventually. Actually, some were passed a few years ago taxing all wealth of people expatriating the USA, but as the deductible was $600k, cash and articles, yours truly would be unfortunately unaffected. They already have the $10k cash or equivalent rule. They even have "money sniffing" dogs now at airports. I hope to interview a dog to ascertain exactly what money smells like. Might add to the moneyless current discussion thread. Or perhaps a truffle sniffing hog would be more appropriate.

I will try to write up a primer on the topic requested by AllGood4All in the reasonably near future, to be posted on the fabulous new TAE site coming to a computer near you shortly. Or as we would say in the Caribbean, where I am currently visiting friends and quaffing cheap rum, it soon come.

el gallinazo said...

Hey, anyone remember Fukushima? Guess if it is not on CNN or Fox News everything must be A - OK:

http://www.zerohedge.com/contributed/update-fukushima-0

el gallinazo said...

EU embargo on Iranian oil to start on July 1, in order to give the PIIGS time to find alternate sources. Russia is mentioned, though as Iran's ally, I wouldn't hold my breath if I were a pig. There is now a bill to be voted on Sunday in the Iranian parliament to ban oil exports to the EU effective immediately. If this situation doesn't pose the risks of starting WWIII, I would be LMAO.

http://www.ft.com/intl/cms/s/0/a3c736b0-4788-11e1-b646-00144feabdc0.html#axzz1kZV80UKf

A top Russian military official has stated recently that Russia will not stand by idly if Iran is invaded. China cannot afford to lose access to Iranian oil. The domination of Syria, Iran, and Pakistan is the next step on the "long war" western agenda. We are entering an interesting period.

Ash said...

This logic is impeccable, and straight out of the Fed's playbook. If you promise (or "hint" at) increasingly large amounts of QE/bailouts, then you never have to put up the cash! Because that strategy has worked out so well...

http://www.guardian.co.uk/business/2012/jan/26/eurozone-crisis-live-greek-debt-talks-resume-davos#block-19

Spain's new prime minister has just repeated his call for the European bailout fund to be enlarged. Mariano Rajoy insisted that everyone would benefit, as:

the bigger the bailout mechanism is, the less it will probably be used.

Mario Monti made a similar argument a few days ago. No surprise really, as Spain and Italy would benefit most from the promise of a huge bazooka.

el gallinazo said...

I checked my calendar and today is a risk on day. Everything is coming up roses, gentle zephyrs are wafting, the sun is out, and the PIIGS are as happy as ................well pigs in excrement.

bluebird said...

The search box that I use, is located in the right column, appx 8 pages down. It appears to be broken and I'm also getting errors as reported by TaxRevolt.

scandia said...

Two new posts up at London Banker:
Survivor Bias and TBTF Tyranny-Jan21
Hell,Handbaskets & Hellenic Default-Jan 22

AllGood4All said...

Thank you for the suggestions @umaperegrina. I did more searching and got many questions answered, it seems TreasuryDirect is considered by TAE to be on the higher end of (relative) safety for one's cash, and "under one's own control". But still have this concern:

Other than interest-rate issues or US eventual default issues, what do you feel are the specific *downside* risks of having money (via short-term treasuries and/or zero-interest) in TreasuryDirect?

Given that the government can now apparently just put someone on a list of "terrar" suspects and then seize the contents of safety deposit boxes, aren't there concerns about having one's cash sit right in the government's treasury?

"Didn't pay the new higher taxes" "protest too much", "contributing too much to radical blogs" "growing too much local lettuce" - and - boom - your Treasury assets are "frozen" ...

I guess I'd appreciate clarification of just how "under/out of your own control" cash in TreasuryDirect really could be...

Thank you!

Franny said...

@AllGood4All
It is all about relative safety and diversification. Of the people likely to steal your money, the U.S. Treasury seems to be low on the list for law-abiding folks, compared to home burglars/robbers, financial institutions like brokerages, banks. The reason is that the government has (1) the ability to print new dollars as needed, so it has no need to steal yours; and (2) a self-interest in not discouraging folks from lending it money. I don't think that my credit union will steal my money, but I do think that it could run out of dollars if there is a run on it, and the government sponsored entity that ensures my deposits could run out of dollars too. Sure, the government can find a way to provide more dollars to the FDIC etc. but that can take time and is not guaranteed.

Ahimsa said...

Good to be back reading TAE! Thank you for Stoneleigh's great Q/A videos. Nice to see the TAE virtual community still here and doing well. :)

AllGood4All said...

@Franny
"relative safety" - understood
"diversification" - understood

It's the malleability of what constitutes "law-abiding citizen", the fact that it is the government's choice to define, and that money in TreasuryDirect is in the government's possession/control that is of concern.

It seems that many TAE contributors feel that the government is moving in totalitarian directions and that this would accelerate in a deflationary collapse, with laws and regulations changing/being revoked, and imposed rapidly and unpredictably. How much of a concern is this to you relative to TD holdings?

I'm not saying "don't put your money in TreasuryDirect" - I'm just asking for the TAE Communities' informed exposition of the possible downside risks.

Thank you.

Stoneleigh said...

Ahimsa,

Good to see you back. Our TAE community is something special, and is worth the world to me :)

www.greenworldbvi.com said...

Actually, whilst I am not a big fan of Soros personally, I do believe he is correct that there exists the possibility for some form of class warfare. We've seen riots in Greece, demonstrations in Italy, and OWS in the States. This may well be just the tip of the iceberg.

AllGood4All said...

In other words, I'm not so concerned - in the near-medium future - about money in TD being bankrupted away as it could be in a private bank or cu. I have concerns about TD accounts being used by the government - particularly in a collapse - in a control and punitive sense...

They could expand the definition of who's a "terrarist" and therefore who needs control/punishment by having their account frozen or confiscated...

They could say, "Well you didn't pay the new our just imposed new National XYZ Tax, or pay enough of your Student Loans back, or or pay the new Belong to America Fee , so we just removed it directly from your TD account"....


Thoughts?

John Day said...

el Gallinazo,

Latest Fukushima story is that Boise infants suffered the highest rate of "excess deaths" following the Fukushima fallout delivery to their area.
http://www.kivitv.com/news/local/138006823.html

Ilargi and Stoneleigh,

Thank you both yet again for such a clear summation of the situation, which we all face. ("If we don't hang together, we shall most certainly hang separately.")

Gravity said...

I've been reading The Open Society and its Enemies. This is a good book. Karl Popper demolishes Plato's totalitarian approach to the ideal rule of the city-state and his formula of arresting all social change.

This part seemed familiar, the same class model was recently mentioned in the article about the 'praetorian' class.

"Plato’s best state is based on the most rigid class distinctions. It is a caste state. The problem of avoiding class war is solved, not by abolishing classes, but by giving the ruling class a superiority which cannot be challenged. As in Sparta, the ruling class alone is permitted to carry arms, it alone has any political or other rights, and it alone receives education, i.e. a specialized training in the art of keeping down its human sheep
or its human cattle (In fact, its overwhelming superiority disturbs Plato a little; he fears that its members ‘may worry the sheep’, instead of merely shearing them, and ‘act as wolves rather than dogs’. This problem is considered later in the chapter.) As long as the ruling class is united, there can be no challenge to their authority, and consequently no class war."

"Plato distinguishes three classes in his best state, the guardians, their armed auxiliaries or warriors, and the working class. But actually there are only two castes, the military caste—the armed and educated rulers—and the unarmed and uneducated ruled, the human sheep; for the guardians are no separate caste, but merely old and wise warriors who have been promoted from the ranks of the auxiliaries."

About Socrates:
"He felt that the way to improve the political life of the city was to educate the citizens to self-criticism. In this sense he claimed to be ‘the only politician of his day’, in opposition to those others who flatter the people instead of furthering their true interests."

That description reminded me of Ron Paul's technique, concerning criticism of the people's appetite for imperialist warmongering.

Glennda said...

Here is an interesting article on working conditions in China where most of our electronics are being made.

How the U.S. Lost Out on iPhone Work
(the worker conditions in China etc)

http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html

Especially note that they work 12 hour shifts and live in barracks at the factory.

Of course when shipping gets too expensive things will "change".

Gravity said...

Popper seems to value democracy in that it ideally opposes violence and tyranny, which he sees as the only form of rule to be absolutely avoided.

"The theory I have in mind is one which does not proceed, as it were, from a doctrine of the intrinsic goodness or righteousness of a majority rule, but rather from the baseness of tyranny; or more precisely, it rests upon the decision, or upon the adoption of the proposal, to avoid and to resist tyranny."

"For we may distinguish two main types of government. The first type consists of governments of which we can get rid without bloodshed—for example, by way of general elections; that is to say, the social institutions provide means by which the rulers may be dismissed by the ruled, and the social traditions ensure that these institutions will not easily be destroyed by those who are in power. The second type consists of governments which the ruled cannot get rid of except by way of a successful revolution—that is to say, in most cases, not at all. I suggest the term ‘democracy’ as a short-hand label for a government of the first type, and the term ‘tyranny’ or ‘dictatorship’ for the second. This, I believe, corresponds closely to traditional usage."

"He who accepts the principle of democracy in this sense is therefore not bound to look upon the result of a democratic vote as an authoritative expression of what is right. Although he will accept a decision of the majority, for the sake of making the democratic institutions work, he will feel free to combat it by democratic means, and to work for its revision. And should he live to see the day when the majority vote destroys the democratic institutions, then this sad experience will tell him only that there does not exist a foolproof method of avoiding tyranny. But it need not weaken his decision to fight tyranny, nor will it expose his theory as inconsistent."

Nice. But then there's the POTUS' purge panel, which cannot be divested from authority by democratic means since there is no law establishing such authority.
Popper may not have considered that some tyrannies are so volatile that the people might not live another day to fight it, if they do not resist the overthrow of democracy.

freedom said...

Ilargi, Stoneleigh, Ash - brilliant summation! Thank you.

Gravity said...

@Glennda
I learned about Shenzen just last week. You should read the Chinese Costitution, all will become clear.
It literally states that the chinese people are all slaves and have no right to complain. They do have a defined right to rest, to prevent that they'd be worked to death.

http://english.people.com.cn/constitution/constitution.html

freedom said...

"Most people have heard the expression, "killing the goose that laid the golden eggs," but many cannot recite the complete story. It goes like this:

A poor farmer one day discovers a glittering golden egg in the nest of his pet goose. At first he thinks it must be some kind of trick. But as he starts to throw the egg aside, he has second thoughts and takes it to an appraiser. The egg is pure gold. The farmer can't believe his good fortune and becomes even more incredulous the following day when he discovers another golden egg. Day after day, upon awakening, he rushes to the nest to find another golden egg. He becomes fabulously wealthy. It all seems too good to be true.

But with his increasing wealth comes greed and impatience. Unable to wait day after day for the golden eggs, the farmer decides to kill the goose and get all the eggs at once. But when he opens the goose, he finds it empty. There are no golden eggs and now there is no way to get any more. The farmer has killed the goose that laid them.

But there is another chapter to this story that goes untold.

Although the farmer rues his decision to kill the goose, he realizes that it is no grave misfortune. After all, he has become fabulously wealthy; he is no longer a poor dirt farmer. His financial future is assured. Although there will be no more golden eggs, there will also be no more poverty. Killing the goose, while unfortunate, does not entail a financial crisis. He will be okay."

There's another good quote by Thomas Jefferson:

"Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains."

http://jkozy.com/Killing_the_Goose_that_Laid_the_Golden_Eggs.htm

"

Skip Breakfast said...

@ el Gaz

Freshly printed US dollars actually have a very powerful smell. I must admit it's a smell I like, but I could smell it from across the table at my bank as it went through an automatic counting machine. If I could smell it across the room, a dog could smell it very easily I expect!

Franny said...

@AllGood4All
I am not sure what kind of answers you are looking for. Of course your government can do bad things to you if it decides to punish you. It can do a lot worse than taking your money in the Treasury, it can arrest you, incarcerate you and kill you and/or your loved ones. It can take your house and all your worldly goods. This is not news. The question is, is there somewhere safer than your bank or house/back yard for excess dollars, and the answer is that TreasuryDirect short term bills is relatively safe from theft, fire and flood.
I don't think that anyone here has advocated keeping all of your savings there.

Ian Graham said...

too bad Nicole is holding a bottle of bottled water during this. how unsustainable/unnecessary is that!

snuffy said...

Ian,
She drives a car too.[What pointless drivel].

All of us live in the meat world,and,while it might be nice to live in a theoretically perfectly sustainable way{see Portladia on Netflix} we are all real folks...not cartoons.

We all try to make the good not the enemy of the perfect.

How 'bout you?Have you made a real commitment in your life to sustainability?,I have... never purchased a "New"truck or car,built my home out of a lot of recycled material,pulled from scrap bins...and live as green as I can.But I add the disclaimer"Within reason".It is not possible,without a whole lot more money than I have to live that way...and I chose not to live "low"as some may...Hell,it cost a fortune just to eat decent food,which is why this year I intend see just how much food I can grow this year.YMMV

Bee good,or
Bee careful



snuffy

Eudrin Roust said...

This morning, the DOW just took out its high from May 2011... How does this square with the thesis that we are in a 3rd leg down in the Elliot Wave Model?

I will be the first to admit that Stoneleigh presents one of the most well-informed and expansive visions of reality that can be found anywhere on the interwebs, but I've never understood the infatuation with Prechterian-style augury which has been cited on more than a few occasions here at TAE.

As far as I'm concerned, the Elliot Wave Model is one of the most offensive and useless forms of pseudoscience to have ever existed and should be publicly ridiculed as such. From what I understand, Prechter has been calling for DOW 1000 since around the time I was in diapers, and my guess is that he'll still be calling for DOW 1000 even once he's in diapers.

So what gives? Does TAE get some kind of kick-back from Prechter's subscribers? If not, then why does it continue to assist in the propagation of such foolishness?

What am I missing here?

ben said...

glennda, Last Train Home is a fantastic chinese documentary that will really give you a feel for what it is like for a Chinese peasant family immersed in the Kool Aid.

ian graham, I feel your pain but fortunately what you are seeing is an advance product placement for TAE's new custom line of big berkey-filtered water products that will be available at the theautomaticearth.org store. the packaging is reclaimed and BPA-free, of course. do you agree that stoneleigh could have done a better job of orientating the label?

A Fall Guy said...

Here in Canada, most people live in a bubble world. The GFC is for everyone else - everything here is fine. Hey - don’t look under that rug!

about a third of families that have debt now hold 73 per cent of all household debt in Canada

all of the rise in debt since 2007 has been driven by borrowing from those with a high debt-to-gross income ratio

It's not only the amount of debt Canadians are carrying, but how many are getting close to the limit of their borrowing capacity

It would have been nice to have found that the rise in debt was coming from those with a lot of room to borrow, but instead what we see is those with a lot of debt are piling on more

Indeed. Borrowing not by those who can afford it (to “stimulate” the economy by buying trinkets), but by those falling off the bus (who need to spend on food and shelter).

Ash said...

Eudrin Roust,

Personally, I am very skeptical of the specific probability assessments associated with "wave counts" in EWT. However, Prechter's theory of socionomics is very instructive when it comes to identifying the fractal nature of financial markets at different scales and its intimate connection to the collective sentiment/mood of investors. We do see general, self-similar patterns involving small periods of optimism (impulsive) followed by larger periods of pessimism (corrective) and so on. As the government and central banking tactics of "hinting at", proposing or actually implementing policy intervention have diminishing returns on maintaining collective investor confidence in the insolvent institutions of the world (and especially Europe) or the fundamentally overvalued markets, Nicole is entirely correct to point out the high risk of sharp market declines occurring in upcoming months.

Journal Actif said...

Nicole, this is the second video where I hear you say how much more challenging it is to grow food in northen climates compared to other places like England. Yes, you're right, it's challenging, to say the least.

But it's not impossible to do it, and with no energy input (or very minimal, if we want to cut hair strands in four and count the energy used by the screw-driver when building cold frames or a low-tech cold house).

We've been experimenting with Eliot Coleman's winter gardening here in Montreal South-Shore and it works. It's our 1st attempt at doing it for the full winter and we ran in the inevitable "learning curve" problems, but we had our carrots and leeks up until Christmas. Hopefully, we will do better next year, and the year after.

Of course, you won't have fresh tomatoes or potatoes out of the double-protected cold frame in Jannuary in Montreal area. That's what a well stocked pantry and root cellar are for.

But you can certainly grow enough vegetables to supplement a drab winter diet, especially if you manage to keep few hens and rabbits in your yard, when a crisis empties the shelves at the local chain grocery store or make whatever they hold unafordable for most.

Journal Actif said...

I meant growing food in winter or course.

YesMaybe said...
This comment has been removed by the author.
YesMaybe said...

Gravity:

This is somewhat tangential, since it's about your quote from Popper on Plato, and maybe you're already aware of it, but the state discussed there isn't actually Plato's ideal state. Check out http://classics.mit.edu/Plato/republic.3.ii.html . You can search there for "out of the needs of mankind" to see where he starts discussing it, and down to where he says that the best state would be very simple, but that if you also want luxuries then you get all sorts of nasty things becoming necessary.

el gallinazo said...

AllGood4All

As we have pointed out, federal officials can seize your assets if they claim that you are aiding and abetting terraists by humming John Lennon's "Imagine," that your IQ is too high for their liking or the public weal, or that the height of your head to your torso does not follow a pleasing Fibonacci ratio. However, they can and have seized these assets just as easily from banks and credit unions as td.gov. So singling out this danger to td.gov is not valid.

Nassim said...

Julia Gillard

What an embarrassment: Australia's lady prime minister had to run away from her own people. Let's not forget that she - like the opposition leader, Tony Abbott, who also ran away - is a strong supporter of sending Australian soldiers to Afghanistan.

If you were to listen to her speeches, she is trying to emulate Margaret Thatcher. Sorry, I forgot, Thatcher broke down in tears when she was told that her son was lost in the Sahara - he was participating in a rally and was soon found at great expense. They really make me sick, the lot of them. At least guys like Churchill, Botha, Stalin, Mao, Castro, Hitler, Ho Chi Minh, Wellington, Macmillan and so on had some experience of being on the front line before sending others there. I can't imagine any of them running away from people who look scary because they are wearing body-paint and are from another race. Foreget the headlines and the photos - the fact is that not a single person was punched or kicked.

Nassim said...

Japan will inject Y1,000bn ($12.9bn) of fresh capital into Tokyo Electric Power, owner of the Fukushima Daiichi nuclear power plant, in effect nationalising the financially strapped utility, according to people familiar with the matter.

Tepco, Asia’s largest private utility by sales, has lost 90 per cent of its market value since reactors at Fukushima melted down last March after Japan’s earthquake and tsunami. Its shares closed up 5.5 per cent on Thursday in response to news that a deal was imminent; the company is expected to decide finally on the fundraising by the middle of next month.


Japan to inject $12.9bn into Tepco

One day she and her husband ran into the husband’s boss on the street and the two men joked about people like Miki who were terrified of radiation. Miki looked at her husband with new eyes. “I’m raising a family with this man?” she thought. “His child’s life is at stake and he’s making jokes?”

'Radiation divorce' enters Japanese vernacular

IMHO, a guy who does not put his kids' health ahead of his job is a nutter.

bosuncookie said...

Evidence of global warming?

Greenpa said...

just quick before I get lost in today's urgencies- I haven't even had time to read following discussion from the previous thread, re "magical" explanations of flock/school/herd behavior vs. "natural" - two things:

here is what appears to me to be a very elegant piece of new research, by very smart researchers, revealing what I think is a completely unanticipated, and extremely sophisticated, bit of vision processing in jumping spiders:

http://tinyurl.com/7ppe5dr

Another "this is incomprehensible!" ability that turns out to have a "normal" - howbeit astonishing - explanation. Ash- I'm just saying I suspect (personally) those possibilities have not been really examined yet.

El Gal; re quantum effects- I'm eager for more quantum explanations of biological phenomena to surface. In the past decade it has been proposed, and widely accepted, that photosynthesis in plants utilizes quantum phenomena to manage vibration states as energy is tricked out of photons and into sugars. That's really very huge- a quantum (ha) leap in comprehension. And very recently, it's been proposed and data presented that quantum information management is utilized in scent perception in flies. I find the data convincing, and that, I'm ready to believe; it explains much.

http://tinyurl.com/6ksn4gr

So it's not impossible that flocks move based on quantum entanglement - but.. I'm not quite ready to go there yet. :-)

Greenpa said...

hm; I better take back the "quantum information management" - that's too confusing; it's more "quantum information perception"; still very very cool.

Ash said...

greenpa/ben,

Here is one study involving mathematical analysis of relative velocity fluctuations across birds in a starling flock (published 2010). The results seem to support the "scale-free correlation" hypothesis.

Scale-free correlations in starling flocks

ABSTRACT

Here we suggest that collective response in animal groups may be achieved through scale-free behavioral correlations. By reconstructing the 3D position and velocity of individual birds in large flocks of starlings, we measured to what extent the velocity fluctuations of different birds are correlated to each other. We found that the range of such spatial correlation does not have a constant value, but it scales with the linear size of the flock.

This result indicates that behavioral correlations are scale free: The change in the behavioral state of one animal affects and is affected by that of all other animals in the group, no matter how large the group is. Scale-free correlations provide each animal with an effective perception range much larger than the direct interindividual interaction range, thus enhancing global response to perturbations. Our results suggest that flocks behave as critical systems, poised to respond maximally to environmental perturbations.

Punxsutawney said...

Be careful with the truth folks.

Less you become undesirable…..

"Disenchanting the public of official lies is what really rattles those in power. Of course, it is quite possible that most of the public, in the U.S. and elsewhere, doesn’t care about the truth either, however Power is not taking any chances in this regard."

--- said...

Right Arm, El G, as was said in the '70's -

"or that the height of your head to your torso does not follow a pleasing Fibonacci ratio"

They will tie into you for anything.

There is this thing where they tend to pick on middle-aged blonde women which I have affirmed with others. One time a mirror-rimmed jack-booted blonde 20something ubermensch snarled at my husband in relation to me - what is your relationship to her? They ask questions which are none of their business, but if you don't passively put up with it, I'm afraid it will be into the camps with us.

We're in a jam needing to get some tools out of a storage shed in NM and I am having nightmares about going north and getting stopped for driving a Mexican-plated vehicle.

If anyone is interested in some serious tools, who lives in that area (generator, air compressor, fabulous craftsman tool chest full of top-quality mechanic's wrenches) who would like to buy or trade, let me know. My intuition about going NOTB is not letting me sleep.

They are the last of my heritage from my late father but I am afraid to even take a day trip north to get them.

--- said...

I have an inventory list for all the tools. My late father only collected the very best - metals that are hard to find these days.

AllGood4All said...
This comment has been removed by the author.
AllGood4All said...

@el g, et al,

I've simply not noticed much (or any, really) mention of possible downside risk when TreasuryDirect holdings are discussed/recommended on TAE. And that seems incomplete to me. Downside risks of safety deposit boxes, banks, and credit unions on the other hand are - rightly so - presented here aplenty.

After the period of my initial TAE education (which has been incredibly valuable in so many ways) I was about to share with some relatives the idea of moving cash into TD, when I realized I hadn't read on TAE or considered possible downside risks. I felt a responsibility to be aware of and to share the possible downside risks in addition to presenting the benefits - just like I would want to do with any recommendation.

I turned to this forum to seek out information and discussion and reflection. I've noticed some reluctance in addressing the issue. I have guesses as to why. I'm guessing it's because TD is seen here - rightly, in my opinion - as a strong safe haven that a lot of TAE readers are counting on to protect their valuable cash, and the subject of possible downside risks is uncomfortable. I'm also guessing a protectiveness arises when something about Nicole's presentation is challenged (because she is so valuable and because of so many incidents of her being unfairly attacked).

Lest there be any confusion, I think TD IS safer than banks, CU
s and SDB's. I wouldn't have even known about TD if it wasn't for Nicole and TAE. I am grateful for this and the other valuable info and insight on this blog. I often pass on what I learn here with others.

I just think integrity requires us to openly consider and mention risks along with benefits when we educate and share, and i've perceived some deficiency of that relative to TAE's TD consdierations/recommendations.

Responses appreciated.

Ruben said...

Ash,

That paper says scale-free correlation could arise from simple behavioural rules, (such as keep distance, keep heading) but they think criticality is a better fit.

Can you explain criticality as simply as you can?

bluebird said...

I see the main downside to TreasuryDirect, is the possibility that I transfer money from TD to my Financial Institution, but then the F.I. is frozen and not able to withdraw the cash.

I suppose I could setup a 2nd F.I., but what good does that do if all the F.I. become frozen due to a global crisis.

AllGood4All said...

@bluebird

From reading TAE, my understanding is that the recommendation is to have your TD account linked to 3-4 banks/cu's, so if one or two go under, you still have some place to send your money. (doesn't work if all the FI's go under at once....)

Another TAE recommendation i've seen is to keep the time the money sits at the FI to a minimum, such that you would transfer from TD to FI, then withdraw in cash as soon as possible.

The Anonymous said...

Ash -- to follow up on your earlier offer to review some things on TAE that didnt work out, I note you just said...

"Ash said...
Eudrin Roust,

Personally, I am very skeptical of the specific probability assessments associated with "wave counts" in EWT."

Im glad you said that because, after looking back at some of the aspects of TAE that I thought were borderline irresponsible, I would say a good 90% of them were from Stoneleigh, and a good 90% of those likely came from the Prechterian school of thought on an unstoppable rapidly spiraling liquidity crisis (i.e. wave 3 or whatever they call it)

Unfortunately im still too swamped to discuss in detail, but if you too have your doubts about this, then I dont think its fair for me to ask you to defend something you dont believe in either.

Yet when I ask stoneleigh for a critique, I either get (a) largely a reiteration of what she said before, (b) a reference to something along the line of the primers or (c) silence. So unless she is willing to honestly look into some things, and I dont think she will, I dont know if your offer is of much help.

Hombre said...

Nothing in terms of securing resources is risk free!
If someone fails to elaborate on downside risk of purchasing from TD it may be that there is nothing obscure, nothing to fear besides the obvious--that the cashing in time will be too short, which would likely only occur if there was an immediate and comprehensive disaster. (And who can prepare for that?)
I see it as mainly whether you want to bury the loot out back, or, deposit it somewhere-anywhere-in which case TD makes more sense to me than a CD or an account, etc..
Want a amatuer's generalization? Buy a bag of 90% silver, bury 5% in your "soil bank" and TD the rest! Good luck.

Ash said...

Ruben,

I got the impression that there is surely something more going on than simple behavioral rules leading to "emergent" global correlation of the flock movements regardless of scale.

"Given a reasonable behavioral rule (for example, align your velocity to that of your neighbors), correlation strongly depends on the level of noise in implementing such a rule. In a thermal system noise is due to the temperature, whereas in animal groups it is introduced by the inevitable individual error in obeying to any behavioral rule (see, however, ref. 28). Ordinarily, in self-organized systems the lower the noise is, the longer the range of the correlation.

In this context order and correlation have a common origin: They are both large when the noise level in the system is low. Hence, it may be expected that bird flocks, which as we have seen are highly ordered, also exhibit strong correlations. In this case order, correlation, and response would all be a consequence of the capability of flocking birds to obey a certain set of behavioral rules allowing very little tolerance, irrespective of the level of environmental perturbation the flock may undergo.

However, the relationship between noise and correlation may be more complex than that just described. In some cases, correlation (and hence response) reaches a maximum at a specific level of the noise. If noise is lowered below such a critical level, order continues to grow, whereas correlation of the fluctuations actually decreases. This behavior is what happens when a critical point is present."


I'm still trying to better understand how that critical systems aspect applies to biological systems, if at all. In physical systems, the most simple and well-known example is that of sandpiles (made famous by Danish theoretical physicist Per Bak).

http://en.wikipedia.org/wiki/Sandpile

Ash said...

"Once the sandpile model reaches its critical state there is no correlation between the system's response to a perturbation and the details of a perturbation. Generally this means that dropping another grain of sand onto the pile may cause nothing to happen, or it may cause the entire pile to collapse in a massive slide. The model also displays 1/f noise, a feature common to many complex systems in nature."

el gallinazo said...

Pilgrim's Progress

http://www.zerohedge.com/news/explaining-modern-finance-and-economics-using-booze-and-broke-alcoholics#comment-2103790

el gallinazo said...

Old science news

Scientists at Johns Hopkins mistakenly shoot up monkey victim with meth instead of Ecstacy. Primal primate lawsuit expected.

http://tinyurl.com/yly7c9z

Wonder what happened to the ecstasy?

ben said...

ash/ruben,

my reading of that fascinating paper, ruben, is that scale-free correlation does arise from simple behavioral rules. it is emergent:

"Under what conditions do scale-free correlations appear? And what do scale-free correlations teach us about the interindividual coordination mechanism? First, there is no need to postulate the existence of complicated coordination mechanisms to explain scale-free correlations: Simple behavioral rules based on imitation, such as those used in most numerical models (24, 25, 27), are compatible with scale-free correlations. Indeed there are several statistical models based on simple alignment rules that develop scale-free correlations under certain circumstances (17)"

regarding criticality, it isn't its relevance to flocking that i take issue with but its relation, ash. you said,

"I do not believe describing the collective behavior of biological systems (i.e. a starling flock) as a function of "criticality" in complex systems is the equivalent of making a claim outside the realm of science or biology."

that sounds like fractal cosmoslogy which is a cool inversion but to me on a daily level flocking isn't a function of criticality but rather that criticality functions as the means by which correlation is optimized in flocking.

"Increasing the degree of order in the system (by lowering the noise below the critical point) makes the behavioral state of the individuals more stable, but also less sensitive to neighboring behavioral changes. Such higher behavioral inertia depresses, instead of enhancing, the correlation and the global response of the group. Too much noise, on the other hand, equally destroys correlation, so that the system must contain just the right amount of noise to produce a maximum response. For this reason, only at the critical point are correlations scale free. In most physical systems criticality is obtained by tuning some external parameter regulating the noise (such as the temperature) to its critical value. In the case of flocks, however, the critical value of the noise, i.e., of the random deviation from the coordination rules, may be evolutionary hardwired into birds’ behavior."

it seems to me criticality just represents the birds receiving enough feedback to stay sharp, which in turn is emergent.

Joe in NC said...

@Ash & Stoneleigh

Do either of you plan to address the comment form The Anonymous? If so, I hope it doesn't sound "recycled".

@LG

I think you were in a debate of sorts awhile back about whether LTRO was QE or not. I believe you were correct:

Princess Merkozy Kisses Frog, Turns into Hopelessly Indebted Club Med Prince; Berlin Ready to See Stronger ‘Firewall’

"The ECB has Launched QE disguised as an LTRO"

.

Ruben said...

@Ash/Ben/Greenpa

First off, has everybody looked at Boids? It is functioning on three rules, separation, cohesion and alignment.

My reading of the following makes me think they are saying criticality is something other than rules of the road.

Discriminating between the two scenarios above (very low noise vs. criticality) is difficult....

(it) seems, however, to indicate that some kind of criticality might in fact be present in starling flocks.


and...

For this reason criticality is perhaps a more likely scenario for our results.

I am having a hard time wrapping my brain around the application of criticality here, though I get the sandpile. If a hawk is strafing your flock, it doesn't seem useful to only have your sandpile (flock) avalanche (turn suddenly) only under mysterious conditions of criticality. It seems like you would want the flock to turn every time, and very fast. So, I am having a hard time wrapping my brain around this one.

Let me explain my interest.

While working to facilitate pro-environmental behaviour change, I read the book Herd, which references Boids. I watched Boids and read the three rules. I immediately felt there are similar, though unknown, rules governing behaviour like recycling. But before I go off half-cocked, I like to do a little more research.

The research says there are two main schools of thought. One is rules, like Boids. They see another bird move, and they move in response. Their reflexes may be faster than we can imagine, so maybe this can happen very fast.

The other theory is magic, as Greenpa put it--but let's just call it telepathy instead, Basically birds can flock because they are communicating wirelessly, and so they all move at once. In the absence of evidence to support the existence of telepathy, this is taken seriously because the flocks seem to move with great synchronization.

Am I being fair to that school of thought? I am not trying to be an ass, but that is the meaning behind it, isn't it?

But, I don't see why birds would have developed telepathy to swerve around predators, but wouldn't use it to find where the good food is. Or why they would continue to use noises to warn of predators while on the ground, but would flock in the air.

But going back to rules vs. telepathy. TAE talks about herding a lot. I found the book Herd to be convincing in some aspects--it may just be the sheer number of instances you see that affects consumer choice, not the fancy marketing campaigns.

And ultimately, that herd behaviour--recycling, buying real estate or gold, selling stocks--doesn't care about whether it is rules or telepathy, because the end result is the flock turning. So, I am geeking out a bit here, but I am curious.

Franny said...

Re: TD down sides.
I can certainly envision an scenario where a lot of banks/credit unions go under at once and it is difficult to know where to send your TD cash when you want to redeem it. Martin Weiss pointed out in one of his books that the Treasury Department has every incentive to move heaven and earth to allow holders of bills, bonds etc. to redeem for cash as desired. He recalled one instance where someone called him in a panic because he had directed a redemption to state bank that had just gone under, and Weiss said "check your mail, they undoubtedly mailed you a check," and he was right. A check issued by the Treasury is pretty close to cash in hand. I would further speculate that the Treasury will make it fairly easy to cash such checks if there is a banking crisis, although it might take a few weeks to set something up.

ben said...

ruben,

"My reading of the following makes me think they are saying criticality is something other than rules of the road."

yeah they definitely draw that conclusion for some reason (the next grant? :P), if only tentatively - and seemingly in contradiction to other content such as that which i included in my previous comment. it felt like they were reaching. to be fair the mathematical section was greek to me.

Zane Grow said...

"Get out and cut, to the extent possible, all dependence on the government that makes its decisions for all the wrong reasons, and on all other top-down systems that rely on it."

As others have said, it starts with you. But...before you decide where to start you need to know where you stand.

We need to decide on some basic values and some common ground. Otherwise we will create (or maintain) an unsustainable system.

Joe in NC said...

LG,

I hope you did not find it offensive that I did not salute you as "El G"...I had to replace three appliances in the recent months...a washer, dryer, & a TV...and I went with LG. They are all performing well...so consider this a compliment?

.

Joe in NC said...

I think the discussion on TAE may benefit from a mild emphasis on the next large war. I do not think Snuffy would disagree based on prior comments. I pointed out a few things in my previous comments that were very subtle. So how would a "real" war impact most of us?

.

NZSanctuary said...

el gallinazo said...
the vehemence of certainty with which you express your opinions in this murky area strikes me as strange.

You are right that certainty cannot really be expressed - it probably comes from a frustration at equally strong statements given in arguments for standard theory, even when they are contrary to observation.

In my opinion, the only way one may logically assert that some "new" form of energy is not resulting in the acceleration of the expansion of the universe, is to assert that the observations and resulting calculations of this acceleration are bogus and flawed.

Although not really a topic for this forum, the redshift/expansion relationship is questionable. I'll try to find some decent online links for you later.

Hannes Alfven and more recently Anthony Perratt are two of the more prominent people who have written on electromagnetism/plasma in cosmology. Whether or not you agree with their specific analysis is another question entirely. But for me it seems a pity that their work is not explored in more detail by mainstream cosmologists. Cross discipline study with plasma physics and electrical engineering in cosmology seems to be lacking.

el gallinazo said...

One of the most bizarrely endearing aspects of the English language is the individual and exotic term that each social group of animals is labeled. I wonder if this is the case in other languages, or are there just a few words such as herd or flock which describe these arrangements? I suspect that it must prompt our professional translator commenter, FB from the French Alps, to scratch his head in wonderment. Who would have thunk that a murmuration of the lowly and despised starling would now form the apex of avant-garde cognition. Until yesterday, I thought a murmuration was a heart defect.

seychelles said...

TD is almost certain to be hard to contact for days or weeks if TSHTF. Several weeks ago, they changed their login procedure and it was not optimally introduced. Their customer service system was swamped and they were not returning phone messages for 3-4 days, if at all. This means that your money may be relatively safe, but it may not be accessible for reinvestment or transfer to a local facility for some time after things start to really heat up. Plan accordingly.

Also, excellent interviews on Bill Moyers this week with John Reed and Senator Byron Dorgan at

http://billmoyers.com/episode/full-show-how-big-banks-are-rewriting-the-rules-of-our-economy/

Mark said...

NZsanctuary said...
"Although not really a topic for this forum, the redshift/expansion relationship is questionable".
You might check out Gravitational energy and cosmic "acceleration":"dark energy" explained within general relativity. The author is David Wiltshire. The link is www2.phys.canterbury.ac.nz/~dlw24/universe/

Herbal Floyd said...

Shall we go digging in the archives?

el gallinazo said...

TD.gov is no substitute for backyard national. If your total assets are too large to store in backyard national, then TD.gov is the safer choice to put much of the remainder. Backyard National should be large enough to get you through at least 6 months of expenses. There is a lesson which should have been learned from MF Global, where Corzin and Dimon stole well over a billion dollars from the clients with no punitive action. Technically, the segregated funds stolen should have been legally more secure than money in a checking or savings account of a bank. The money you put in the bank is legally a type of loan, but the money in the segregated accounts at MF Global were not a loan, but more like a safety deposit box left on the premises for immediate use for margin calls or trades if the need arose. As for insurance, the billion plus which Corzin and Dimon stole was also purportedly insured, but the insurer, the CME, chose not to make good on it. Ann Barnhardt reasons that they chose not to, because the CME knows that MF Global is the first cockroach of a swarm, and the CME does not wish to establish a legal precedent. Also, even today, as Senator Dirkson expressed many years ago, a billion is real money.

el gallinazo said...

As I am not qualified or capable of personally evaluating the advanced mathematics involved in many problems of general relativity, I have given dark energy some credence for "political" reasons. The international scientific consensus tends to be extremely conservative and weighed against new ideas and paradigms that shake up the old order. And physics is the most conservative of the bunch. Only the most aggravating data will force the consensus out of its old path, dating from the Ptolemaic to Copernican revolution and including the switch from Newton and Maxwell to quantum mechanics and relativity. To me, the fact that the international community has accepted to a large degree dark energy as an unexplained reality despite the more than considerable embarrassment it brings to the profession, indicates to me that hundreds of the best physicists have racked their brains and failed to come up with an alternate solution which would leave the old ediface intact. In a fashion, it reminds me of the Euro crisis.

Ilargi said...

News post up.





The Report That Will Blow Up The Eurozone




.

Greenpa said...

Hi all; still struggling to find minutes to spend here, and feeling guilty about not - because in fact the quality of the conversation is pretty high. I'm pooped today, and will be poopeder; yesterday took on the nature of a Congressional Fire Drill, in terms of input vs. productivity; gotta try to make up for it a little today... (I was searching to an alternative term to the now clearly non-PC term "Chinese fire drill", popular in my youth, and Congressional popped quickly into my head.)

very quickly: from Ash: "the pluralism of causes and effects in biological networks is better addressed by observing, through quantitative measures, multiple components simultaneously and by rigorous data integration with mathematical models" Sauer et al[4]"

I should reveal that I have another bias there- I'm pretty anti mathematical models, per se, at this point. Keep in mind their use in Wall Street, and the "quants"; a term now in disuse and disgrace; my own opinion is that their use in biology is frequently not any better than their use in Wall Street. Their potential and propensity for creating disinformation instead of reflections of physical reality is very- VERY high. It's not that models are a bad tool. It's that mathematical models are claymore sized scalpels, and a certain kind of worker loves to swing them around as fast and as often as possible; appropriate or not.

I wrote about this on my blog:

http://tinyurl.com/4twhu4

Models are very seductive. The urge to fit data into a model is great, when the model is sitting right there, and you can publish with "the fit is good" - when in fact a billion other sets of data will also "fit" just as well.

So- disclosure- at this point in my intellectual development, the argument "look, it fits this mathematical model pretty well" turns me off; not on. I want a different kind of proof.

Getting cranky in my old age. Hey, it's fun.