Long-lasting systems can't survive if they remain insatiable.
An insatiable thirst for food, power, energy, reassurance, clicks, funding or other raw material will eventually lead to failure. That's because there's never enough to satisfy someone or something that's insatiable. The organization amps up because its need is unmet. It gets out of balance, changing what had previously worked to get more of what it craves. Sooner or later, a crash.
More fame! More money! More investment! Push too hard and you lose what you came with and don't get what you came for.
An insatiable appetite is a symptom: There's a hole in the bucket. Something's leaking out. When a system (or a person) continues to demand more and more but doesn't produce in response, that's because the resources aren't being used properly, something is leaking.
If your organization demands ever more attention or effort or cash to produce the same output, it makes more sense to focus on the leak than it does to work ever harder to feed the beast.
Slowly but surely global growth estimates have been ratcheted down. Courtesy of Google Translate from an Italian news site, please consider IMF estimates two years of recession for Italy
Deep red for the Italian economy in the next two years. Against the background of a global recovery stalled, slowed by the crisis in the eurozone in particular, Italy is preparing to reach out to two years of recession in 2012 and 2013. The cold shower comes from the International Monetary Fund put in hand as usual to their predictions gave a general scissor kick to the estimates of growth around the world.
Last update at the World Economic Outlook that the Ansa news agency is able to anticipate its spread before the official next Tuesday, the IMF finds in the euro area's main patient who staggers a little and infects all international economies. "The global recovery is threatened by the growing tensions in the euro area," considered the "main reason" the deterioration of economic prospects.
And it is complemented and intertwined "the financial fragility elsewhere." The Fund therefore warns that the downside risks have escalated. So economists in Washington have been forced to make a clean break with all the statistics and this in large part because "it is expected that the euro area economy will end up in a mild recession in 2012."
World growth will be just 3.3% this year and 4% next, with a downward revision, respectively, 0.7 and 0.5 percentage points. For the whole area of the single currency, however, is expected to decline in GDP of 0.5% in 2012, with a downward revision of 1.6 percentage points. Growth will return in 2013 instead, but it will be only 0.8%.
But far worse is the Italian situation. For the contraction in GDP this year will exceed even the 2% to 2.2%, with a cut by 2 ½ points compared with the estimates of last September. And the plus sign will not be able to come back even in 2013, when the GDP will drop by 0.3%.
European Recession Neither Mild Nor Short
Notice how the estimate from Europe went from growth to a "mild recession".
On Thursday I had the pleasure of doing another segment on Capital Account with Lauren Lyster. I come in at about the 3:45 minute mark for much of the rest of the 30 minute session.
By the way, thanks to silicon valley companies including Google and Facebook, as well as vast majority of bloggers who were well out in front of this issue, The Hill reports GOP chairman shelves Stop Online Piracy Act.
House Judiciary Committee Chairman Lamar Smith (R-Texas) announced on Friday that he will postpone consideration of his Stop Online Piracy Act (SOPA) until there is wider agreement on the controversial legislation.
Smith's announcement came just minutes after Senate Majority Leader Harry Reid (D-Nev.) announced he would shelve the Senate's version of the anti-piracy legislation, the Protect IP Act.
The move is a stunning acknowledgment of failure for the powerful chairman.
Smith was the author of SOPA and its most vocal proponent. He had repeatedly said the bill did not need to be changed and accused the critics of "spreading lies."
But support for the bill collapsed after a massive Web protest on Wednesday. Major sites including Google and Wikipedia either shut down in protest or displayed messages opposing the legislation.
Triumph for the Little Guys
This was a triumph "for" the little guys (bloggers and alternate news sources). It was also a triumph for justice and common sense (as well as defense of freedom of speech).
I would like to report this was a triumph "by" the little guys but unfortunately it wasn't. When campaign contributions stop from Google and other big money corporations, politicians listen. This was one set of big donors (media giants) vs. another set of big donors (internet companies).
Lamar Smith vowed to revisit the issue. "It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products."
Every week someone sends me an idea on how to fix various housing problems.
Many want home prices to stop falling and many others want to bail out homeowners because banks were bailed out (as if two wrongs make a right). Others want to stop foreclosures even though the very best thing for most of the people in trouble would be to shed the albatross by walking away.
The one thing they all have in common is a misguided proposal to bailout someone at the expense of someone else (typically the government but few figure out the government means taxpayers).
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.
Fixing the "Un-Real Estate Mess"
Last week I received a different kind of proposal that merits a much closer look than all of the various bailout proposals I have seen to date.
My friend "BC" writes ...
Hello Mish
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.
Unreal estate is the best investment for lenders and taxing authorities, not dead-pledgers.
The value of an unreal estate loan should not exceed the householder's income and should be 100% collateralized by an asset or funds other than the property.
If someone wants to mortgage a house, and his household income is $50,000 (around the current US median household income), he should not be lent more than $50,000, and he should have at least that much in collateral in order to qualify for a "dead pledge".
That way, the debt is self-liquidating. Terms should be no more than 10 years.
By the way, this system was generally the norm for centuries before the period after WW II. We assume that what has been the norm in our lifetimes is the only way it should be or can be. We have the colossal mess because we have allowed ourselves to be taken over by the rentier mentality, which always leads in the extreme to unserviceable debts, extreme wealth and income concentration, and economic and social crises and collapse.
A further decline of 15-20% in residential unreal estate values will mean a complete wipeout of all US household net wealth/equity of the bottom 90% in terms of mortgage debt and consumer credit outstanding. In effect, 270 million or more Americans are already renters or neo-feudal peasants "bound to the land" by mortgage and consumer debt and the tax code.
It is appalling and obscene that we assume as a normative condition spending 5-6 times the perceived market value (debt-based value) of a house over a lifetime when costs of principal, interest, taxes, and maintenance/improvements are included, whereas the rentiers have little or no accompanying social obligations to support public infrastructure required for productive enterprise.
Worse yet, in the process of favoring and enabling the rentier domination, we punitively tax labor, production, productive capital investment, savings, and productive capital accumulation while encouraging rentier speculation, waste, ecological degradation, and resource depletion.
Increasing non-productive rentier gains to the top 0.1-0.4% of US households have resulted in deindustrialization, militarization, financialization, hopeless indebtedness, obscene wealth and income concentration, and the gutting of the productive capacity of the US economy.
Banks should not be permitted to take a $1 deposit, set aside $0.03 in reserve, and then lend $1 at a 7-10%/yr. growth rate and then go broke and have to be recapitalized by the central bank and government borrowing every 9-11 years when compounding interest burden exceeds labor product growth.
Banks should be required to collateralize all loans at 100%; that is, only be allowed to lend their own money, not depositors' money. However, banks should be allowed to charge whatever they like for custodial services.
Banking should not be permitted to make money from making money and thus encourage wider use of increasing leverage to capture eventually all net after-tax real labor product for a generation, leaving labor incapable of sustaining itself after taxes and debt service.
Of course, all of this would mean effectively returning to something like a Victorian-era banking standard, which no rentier, politician, or most of the public will accept.
My friend "HB" replied to "BC" ...
I absolutely agree, except I would also allow banks to be middlemen between savers and borrowers, i.e., allow them to lend out savings that have a fixed term for a corresponding fixed term. That way no new deposit money would be created.
Libertarian Approach
Under the conditions outlined above, home prices would be very stable.
Some might question how that would fit in with a libertarian approach. I have an answer: In a free market there would not be a Fannie Mae, a Freddie Mac, a HUD, or an FHA. More importantly, fractional reserve lending would be outlawed as fraud, and there would be no Fed.
Perhaps some lenders would be willing to make loans longer than 10 years, but not many. I would not stop those who did. Rather than a set of rules that "BC" proposed, a free market left on its own accord would gravitate to a set of workable procedures, probably very close to what "BC" suggested.
Long-Term Solution
In light of the above, the required solution is to
Get rid of the Fed
Get rid of fractional reserve lending
Get rid of Fannie Mae, Freddie, Mac, HUD, and the FHA
One presidential candidate has those views. That person is Ron Paul.
Facebook.. such a blessing and such a curse. If you don't agree with the latter, please read this article and see for yourself. These are the funniest Facebook status scenarios we've ever seen. They had us hiding in shame while bursting out laughing.
Color is not as simple as it seems. According to this infographic from CertaPro Painters of Louisville, it evokes emotion and triggers your senses. With this in mind, the infographic beautifully explores colors that should and should not be used in interior decorating, as well as why certain colors are used in advertising.
Last year, VW's Star Wars-themed commercial was the hit of the Superbowl. Well this year they are again back, and it looks like they might have something even more awesome! We don't know exactly what is going to happen in the Volkswagen 2012 Superbowl commercial, but if this teaser, filled with singing dogs performing the Imperial March from Star Wars is any indication, it is probably going to steal the show.
Located in a small valley in Flims (Laax Falera), Switzerland, the POD Hotel is aimed to be a universal model for more sustainable tourism. The Pods are made of wood and easily assembled. It has basic amenities and are big enough to house two tourists and offer enough comfort and peace.
Postări
