bank run blog

Sadly, the 20th of April has become known in the United States as the anniversary of the mass shootings at Columbine High School in Littleton, Colorado in 1999. Moreover, sociologists have noticed that the whole calendar for April is crowded with similar unhappy “anniversaries,” such as the Virginia Tech shootings two years ago and the bombing of the Murrah Federal Building in Oklahoma City in 1995. (So-called terrorism expert Steven Emerson appeared on network television shortly after the blast to proclaim that the attack had numerous “Middle Eastern traits”.)

It is perhaps not surprising that what has become a peculiarly, if not exclusively, American pastime would wind up having its own special day, and for many April 20th is that day.

But there are a few welcome signs of a backlash against the fetishistic, violent tantrums that threaten to define our culture in its decline. The New York Times reports :

“Long stigmatized as political poison, the marijuana movement has found new allies in prominent politicians, including Representatives Barney Frank, Democrat of Massachusetts, and Ron Paul, Republican of Texas, who co-wrote a bill last year to decrease federal penalties for possession and to give medical users new protections.

The bill failed, but with the recession prompting bulging budget deficits, some legislators in California and Massachusetts have gone further, suggesting that the drug could be legalized and taxed, a concept that has intrigued even such ideologically opposed pundits as Glenn Beck of Fox News and Jack Cafferty of CNN.”

Last week, the venerable progressive journal In These Times ran a feature on the gathering momentum for reform :

“As a medley of border violence, recessionary pressure, international criticism and popular acceptance steadily undermines America’s decades-long effort to eliminate drugs and drug use, the U.S. movement to legalize marijuana is gaining unprecedented momentum.

Once derided and dismissed by lawmakers, law enforcers and the law-abiding alike, marijuana reform is sweeping the nation, although the federal government appears committed—at least for the time being—to largely maintaining the status quo.”

Advocates for legalization are marking the occasion by launching a national public awareness campaign, to include television spots. According to news agency PR Web :

“The Foundation for the National Organization for the Reform of Marijuana Laws (NORML FOUNDATION) a Washington, D.C.-based advocacy organization established in 1997, is purchasing advertising time on selective cable outlets to underscore the urgency of decriminalizing marijuana also known as cannabis.

The NORML Foundation launched this Marijuana Law Reform Advertising Campaign on 4/20, a day marked as a holiday celebrated worldwide by the cannabis culture to create further political pressure on the federal government to both recognize 1) the ever-increasing support of Americans who favor cannabis legalization and 2) the clear sea change of cannabis laws that’s been happening at the state level since Californians voted in favor of medicinal access to cannabis in 1996.”

New York Times : Marijuana Advocates Point to Signs of Change

In these Times : An End to the War on Weed? Marijuana advocates believe legalization is on the horizon.

PR Web : Marijuana Advocacy Group Launches Cable TV Ad Campaign on ‘4/20′

Examiner.com : National Weed Day fuels marijuana legalization debate

The President of the Maldives has stated that he will establish a contingency fund with a portion of the country’s revenues from tourism, to purchase land for an alternative settlement should the island nation be inundated by rising sea levels caused by global warming. Mohamed Nasheed, a human rights activist and former political prisoner who swept to power in elections in November, said that a number of other nations, including India, Sri Lanka, and Australia were “receptive” to discussions on the issue. The majority of land in the Maldives, an archipelago of 1192 islands in the Indian Ocean, is just 1.5m above sea level.

Nasheed said in an interview with the Guardian newspaper, “We can do nothing to stop climate change on our own and so we have to buy land elsewhere. It’s an insurance policy for the worst possible outcome.” Climate scientists have warned that the Maldives will be significantly impacted if global warming continues to lead to rising sea levels in the world’s oceans.

cross posted at

redstateupdate.net

originally published November 12, 2006

As a variety of local and regional statistics continue to confirm that a significant adjustment in real estate values is occurring across the country, industry observers are pointing to the impending collapse of the home equity loan market as a further sign of the deterioration of the housing market. A downturn in equity extraction is expected to have a severe impact on consumer spending, which accounts for almost 70 percent of US economic activity, in 2007 and 2008.

Although mortgage equity extraction hit record levels in the first half of 2006, experts predict a dramatic slowdown, attributing most of the recent activity to mortgage holders rushing to get out of interest-only loans that are due to reset to higher rates. From 2000 through June of this year, total home equity actually declined by 4 percent, despite an increase in total home values of 78 percent.

Just as many homeowners who purchased short-term adjustable rate mortgages are facing sharp increases in their payments without realizing commensurate gains in value, holders of home equity loans may find themselves making payments based on an ultimately unrealizable value. In both cases the consumers risk paying back loans that greatly exceed the value of the assets. Sharp reductions in real estate value make effective refinancing of such debt impossible for most individual homeowners.

Some economists have criticized the Federal Reserve for failing to act decisively to prevent, or at least curb, the housing bubble. Last January, in an article surveying the career of outgoing Fed Chairman Alan Greenspan, the Economist noted, “From a risk-management perspective, the case for acting against the housing bubble is even greater than for the stock market bubble. A housing bubble has bigger wealth effects on consumer spending, so a collapse in housing prices would cause more economic harm than one in share prices.” But Greenspan was reluctant to quell spending, which is increasingly the only agent for growth in the US economy.

It remains unclear how the US economy will replace equity withdrawal activity. In the third quarter of this year, even with more than $250 billion in equity extraction, US GDP was up only 1.6 percent. If that activity is significantly curtailed, analysts agree that negative GDP is a likely result.

cross posted at

redstateupdate.net

The November employment numbers, published this morning, are even worse than expected, as the economic contagion spreads to previously unaffected sectors. MarketWatch reports :

“U.S. nonfarm payrolls plunged by an astonishing 533,000 in November, the worst job loss in 34 years, the Labor Department reported Friday.

It’s only the fourth time in the past 58 years that payrolls have fallen by more than 500,000 in a month. Since the recession began 11 months ago, a total of 1.9 million jobs have been lost.”

The notoriously understated official unemployment rate is nearing levels planned for after the inauguration in January :

“The unemployment rate rose from 6.5% in October to 6.7% in November, the highest jobless rate since October 1993.

Job losses were widespread across industries in November. Fewer than a third of industries were hiring in November. In services-producing industries, 370,000 jobs were lost, the most since August 1983.

The employment report was much worse than expected. Economists expected job losses of around 350,000 in November. They expected the unemployment rate to rise to 6.8%.”

Buried in the report, and the reporting, are significant revisions of the September and October figures :

“Job losses in September and October were revised sharply lower by a total of 199,000. Over the past three months, payrolls have fallen by an average of 419,000 per month, compared with average monthly losses of 82,000 earlier in the year. The percentage drop in employment over the past three months is the largest since 1980.

An alternative gauge of unemployment – which includes discouraged workers and those whose hours have been cut back to part-time – rose to 12.5% from 11.8%. The number of workers forced to work part-time rose by 621,000 to 7.3 million.”

Traders hoped that they had “priced in” the negative data, but were unpleasantly surprised this morning, according to the Associated Press :

“News of a rapidly weakening job sent stocks falling Friday as investors feared that the recession will be deeper and more prolonged than many have expected. The major indexes were all down more than 2 percent and the Dow Jones industrials fell more than 200 points.”

Analysts told the AP that Thursday’s sharp downward move just before market closing was directly related to the unemployment numbers :

“Although stocks fell after the report, analysts said Friday’s retreat likely would have been steeper if the market hadn’t tumbled in the final hour of trading Thursday in anticipation of a weak reading.”

MarketWatch : Payrolls plunge by stunning 533,000 in November

Associated Press : Stocks tumble after dismal jobs report

A recently released study reported that global wealth grew by 4.9 percent overall to $109.5 trillion in 2007. The report also showed that wealth continues to concentrate and that the chasm between the world’s richest citizens and the world’s most impoverished citizens continued to widen.

The Boston Consulting Group reports in its study Global Wealth 2008 that “wealthy households”, defined as worth more than $100,000, 12 percent of all households, owned 88 percent of the world’s wealth. The study also found;

~The top 1 percent of all households owned 35 percent of the world’s wealth last year.

~Households worth over $1 million grew by 11.2 percent (10.7 million households).

~The region that the Boston Group calls the “Asian Pacific” region grew by 17.4 percent.

~Wealth grew the most in China and India, with growth in China rising by 36.8 percent.

~In Russia, households that are worth more than $1 billion own 66 percent of all Russian wealth.

~In Singapore, one in ten households are worth over $1 million.

see report-
Boston Consulting Group : Global Wealth 2008