March 10, 1906 - Courrières (France) Mine Disaster. 1099 miners (including children) lost their lives.
March 25, 1911 - Triangle Shirtwaist Factory fire in New York City. The fire caused the deaths of 146 garment workers
March 28, 1943 - Caterina Costa exploded in Naples, Italy, killing more than 600 and injuring 3000
March 18, 1967 - The Torrey Canyon oil spill on the southwest coast of the UK in the spring of 1967 is one of the world's most serious oil spills which left an international legal and environmental legacy that lasted decades. At the time the world's most serious oil spill, as of 2012 it remains the UK's worst, with an estimated 32 million gallons of crude oil spilled.
March 16, 1978 - The Amoco Cadiz ran aground off the coast of Brittany, France, spilling 1.5 million barrels of oil
March 28, 1979 - Three Mile Island accident
March 24, 1998 - Exxon Valdez Oil Spill. 750,000 barrels of oil were spilled in a pristine area
March 11, 2004 - bombing on trains in Spain kill 190 and injure over 2000
March 23, 2005 - Texas City Refinery Explosion. This was the 3rd largest refinery in the US. The explosion killed 15 and injured 170
March 11, 2011 - Fukushima nuclear disaster in Japan
March 28, 2011 - Gunpower explosion at the Ja'ar munitions factory in Yemen, killing 150
Friday, April 5, 2013
Space Tragedies around the end of January
I have previously developed an extensive list of tragedies that occurred around April 20. But there are other unlucky days too. Consider this list of Space tragedies:
January 27, 1967 - Apollo 1 catches fire on the launch pad, killing astronauts Gus Grissom, Edward White and Robert Chaffee
January 28, 1986 - The Space Shuttle Challenger blew up 73 seconds after lift-off, killing the 7 astronauts aboard
Feb 1, 2003 - The Space Shuttle Columbia was destroyed during landing, killing 7.
January 27, 1967 - Apollo 1 catches fire on the launch pad, killing astronauts Gus Grissom, Edward White and Robert Chaffee
January 28, 1986 - The Space Shuttle Challenger blew up 73 seconds after lift-off, killing the 7 astronauts aboard
Feb 1, 2003 - The Space Shuttle Columbia was destroyed during landing, killing 7.
M4 up 0.5% in March
As of 3/31/13:
M2 = 10,450.4
Public Debt = 11,916.9
Fed held = -1805.6
------------
Total (as of 3/31/13) = 20561.7
This is up 0.5% over February.
M2 = 10,450.4
Public Debt = 11,916.9
Fed held = -1805.6
------------
Total (as of 3/31/13) = 20561.7
This is up 0.5% over February.
Thursday, April 4, 2013
Happy Birthday, Agafia!
Source: http://m.vice.com/read/happy-69th-birthday-agafia-lykov-from-your-friends-at-vice
Agafia Lykov was born in the middle of nowhere in Siberia, on April 4, 1944, 250 km from the nearest human beings other than her family. Her parents, Karp and Akulina Lykov, moved to Siberia in 1936 to get away from the Communists and to practice their religion, Old Believer Russian Orthodox. They were discovered by "civilization" in 1978. Agafia had never met anyone outside her family until then. Her brothers and sisters died in 1981, and her father died in 1988.
She visited the nearest big city, Abakan, a few times but didn't like it.
Today she has cats, dogs, and goats to keep her company, as well as a one-legged geologist named Yerofei.
"She’s tough as nails and we can only hope we’ll be as spry as she is when we’re approaching the seven-decade mark. Happy birthday, Agafia!"
Wednesday, April 3, 2013
Tuesday, April 2, 2013
Is Star Wars racist?
See: http://www.theblaze.com/stories/2013/04/01/lego-to-pull-anti-islamic-star-wars-toy-set-following-muslim-furor/
"The game, which is aimed at children aged from nine to 14, features Jabba the Hutt in his intergalactic lair. Jabba, the slug-like villain who first appeared in the 1983 film Return of the Jedi, lives in a domed, oriental-looking building equipped with rockets and machine guns. He also smokes a water pipe and keeps Princess Leia in chains for use as his personal slave. Furious Muslim critics complained that the Lego set’s Asian and oriental figures were “deceitful and criminal” characters such as gun-runners, slave masters and terrorists."
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"The game, which is aimed at children aged from nine to 14, features Jabba the Hutt in his intergalactic lair. Jabba, the slug-like villain who first appeared in the 1983 film Return of the Jedi, lives in a domed, oriental-looking building equipped with rockets and machine guns. He also smokes a water pipe and keeps Princess Leia in chains for use as his personal slave. Furious Muslim critics complained that the Lego set’s Asian and oriental figures were “deceitful and criminal” characters such as gun-runners, slave masters and terrorists."
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The Oracle
Most 742-page jeremiads aren’t much fun to read. But The Great Deformation, David Stockman’s revisionist history of the past 100 years of capitalism American-style, is a spirited, occasionally gleeful skewering of many of our most widely held assumptions and most lionized figures. A former divinity student, Stockman chronicles what he views as the moral rot in the American financial system—one fueled by easy money, profligate debt, and needless government intervention. To a degree, this book is autobiographical. As a congressman, Reagan-era budget official, and private-equity executive, Stockman has lived through the booms and busts of the past half-century. He knows the world of which he writes from the inside out. And in The Great Deformation, few escape his opprobrium—current and past policymakers, Roosevelt and Reagan, Democrats and Republicans, leveraged buyout titans, and corporate CEOs. “Sundown now comes to America because sound money, free markets, and fiscal rectitude have no champion in the political arena,” Stockman writes.
--http://www.thedailybeast.com/articles/2013/04/01/david-stockman-on-the-great-deformation-and-our-economic-doom.html
=================================
See also: Housing Bubble 2.0
Monday, April 1, 2013
The Great Unwind
This was published in May 2012, but I never noticed it before. This is an interview with David Stockman.
"TGR: If we are in the final innings of a debt super-cycle, what is the catalyst that will end the game?
DS: I think the likely catalyst is a breakdown of the U.S. government bond market. It is the heart of the fixed income market and, therefore, the world's financial market.
Because of Fed management and interest-rate pegging, the market is artificially medicated. All of the rates and spreads are unreal. The yield curve is not market driven. Supply and demand for savings and investment, future inflation risk discounts by investors—none of these free market forces matter. The price of money is dictated by the Fed, and Wall Street merely attempts to front-run its next move.
As long as the hedge fund traders and fast-money boys believe the Fed can keep everything pegged, we may limp along. The minute they lose confidence, they will unwind their trades.
On the margin, nobody owns the Treasury bond; you rent it. Trillions of treasury paper is funded on repo: You buy $100 million (M) in Treasuries and immediately put them up as collateral for overnight borrowings of $98M. Traders can capture the spread as long as the price of the bond is stable or rising, as it has been for the last year or two. If the bond drops 2%, the spread has been wiped out.
If that happens, the massive repo structures—that is, debt owned by still more debt—will start to unwind and create a panic in the Treasury market. People will realize the emperor is naked."
===========================
All it takes is a sudden 2% jump in interest rates. That will cause bond prices to drop, and because of leverage, the changes are multiplied.
What is the difference between 1.01 x 1.01 x 1.01 x 1.01 and .99 x .99 x .99 x .99? 1.04 - 0.96 = 0.08. Leverage is a double edged sword. You can lever up to make more money, but when it turns, you will lose much more quickly as well.
New currency
I have previously written about the Gyro (pronounced "year-oh", the same as euro) - which is a Euro with a Y prefix for Greece. There is also the Spyro, which has a prefix of V for Spain.
Now there is the Cypro, which is a Euro with a G prefix.
"Euros in Cyprus are not the same as Euros out of Cyprus. A spread is forced open between what I shall dub “Cypros” and Euros.
Now there is the Cypro, which is a Euro with a G prefix.
"Euros in Cyprus are not the same as Euros out of Cyprus. A spread is forced open between what I shall dub “Cypros” and Euros.
To see this, imagine that you had a bank account at a bank in Germany. Someone in Cyprus says he would like to trade Cypros for Euros. He invites you to open an account in Bank of Cyprus and he has opened an account in Germany. He will transfer 10,000 Cypros to your account in Cyprus and in return you will transfer Euros to him in Germany. How many Euros would you bid to buy his 10,000 Cypros?
Less than €10,000."
--http://www.zerohedge.com/contributed/2013-04-01/cyprus-collapse-triggers-unintended-consequences
--http://www.zerohedge.com/contributed/2013-04-01/cyprus-collapse-triggers-unintended-consequences
"If you share widespread fears that the euro cannot last in its present form, you might want to avoid notes with the prefixes F, G, M, S, T or Y. These are issued by Malta, Cyprus, Portugal, Italy, Ireland and Greece."
--http://blogs.telegraph.co.uk/finance/ianmcowie/100014982/greek-euros-how-to-spot-them/
What would you call Euros from Malta, Portugal, Italy and Ireland?
--http://blogs.telegraph.co.uk/finance/ianmcowie/100014982/greek-euros-how-to-spot-them/
What would you call Euros from Malta, Portugal, Italy and Ireland?
Saturday, March 30, 2013
Systemic Debt 2012
Here is my projection of Systemic Debt for 2012, as I don't have all the data.
This is up 3.6% from 2011, and maybe more, depending on how the Social Security and Medicare Trustee's reports come out.
Systemic Debt as of 12/31/2012
TCMDO 56,281
Intragov. Holdings 4,851
FERS (as of 9/30/2012) 6,274
Soc. Security unfunded (est.) 9,000
Medicare unfunded (est.) 5,500
-------
Total Systemic Debt 81,906
=======
This is up 3.6% from 2011, and maybe more, depending on how the Social Security and Medicare Trustee's reports come out.
Friday, March 29, 2013
Systemic Debt 2007
Systemic Debt as of 12/31/2007:
TCMDO 50,972
Intragov. Holdings 4,093
FERS (as of 9/30/2008) 4,769
Soc. Security unfunded 4,400
Medicare unfunded 2,400
-------
Total Systemic Debt 66,634
=======
For Medicare unfunded liabilities, I am using the 2009 number.
Systemic Debt 2008
Systemic Debt as of 12/31/2008
TCMDO 53,361
Intragov. Holdings 4,330
FERS (as of 9/30/2008) 5,319
Soc. Security unfunded 5,300
Medicare unfunded 2,400
-------
Total Systemic Debt 70,710
=======
Note that the method of calculated the Medicare unfunded liabilities changed between 2008 and 2009. To prevent distortion, I am just using the 2009 number here.
This number is almost identical to 2008.
The Bank of International Settlements
"They head to a fortress of a building that might have been designed as a workplace for George Jetson: a cylindrical tower that looks as if someone squeezed it slightly in the middle, with a base that wraps around without a straight line in sight, the elegance of the curves hiding the imposing thickness of the blast-protective stone.
The building may be steps from the Basel train station, but it isn’t on Swiss soil. Like the United Nations headquarters in New York, it’s an entity without a country, belonging to the world. The sign out front reads “Bank for International Settlements,” but the place might more easily be thought of as the central bank of central banks. "--Washington Post
Is this the secret headquarters of the world, where the real power lies?
System Debt 2009
And here are the numbers for 2009:
So the increase from 2009 to 2010 was 3.7%. Between the end of 2008 and the end of 2009 there was almost no change. This is because of the Great Recession.
This can't be calculated for previous years because the method of calculating the Medicare unfunded liability changed because Obamacare supposedly fixed it.
Systemic Debt as of 12/31/2009
TCMDO 53,278
Intragov. Holdings 4,500
FERS (as of 9/30/2009) 5,284
Soc. Security unfunded 5,400
Medicare unfunded 2,400
-------
Total Systemic Debt 70,862
=======
So the increase from 2009 to 2010 was 3.7%. Between the end of 2008 and the end of 2009 there was almost no change. This is because of the Great Recession.
This can't be calculated for previous years because the method of calculating the Medicare unfunded liability changed because Obamacare supposedly fixed it.
Systemic Debt 2010
This follows up on the previous blog post
I said that this had to increase by about 3% per year. It actually increased by 7.6% from 2010 to 2011. The theory is that we can keep kicking this can down the road FOREVER.
The next trustee's reports come out in April, so I can run the 2012 numbers then.
Systemic Debt as of 12/31/2010
TCMDO 53,636
Intragov. Holdings 4,635
FERS (as of 9/30/2010) 5,720
Soc. Security unfunded 6,500
Medicare unfunded 3,000
-------
Total Systemic Debt 73,491
=======
I said that this had to increase by about 3% per year. It actually increased by 7.6% from 2010 to 2011. The theory is that we can keep kicking this can down the road FOREVER.
The next trustee's reports come out in April, so I can run the 2012 numbers then.
Systemic Debt
Systemic Debt is my measurement of all the debt that is in the system. I am using 12/31/2011 as the measurement date, because that is the last date that I have all the data for. Here are the components:
Now, what is the significance of this? This is pretty much all the debt in the system, both public and private, and the majority of all the debt in the whole world. I am not including unfunded portions of Medicare parts B or D, or Obamacare, because these do not have trust funds and so are not really entitlements. Although a lot of this debt is private, there is an implicit guarantee by the FedGov and FedReserve not to allow widespread defaults.
Debt must increase each and every year into infinity, or the economy is considered to be in a recession. So assuming an increase of 3%/year, that is about $2.4 trillion that the debt must increase every year. Of the total debt, about $44 trillion of this is private debt. The private sector has very little appetite for increasing its debt. Therefore the Federal debt (including unfunded liabilities) must increase by at least $2 trillion/year. Some of the federal funds are used to pay down the private debt.
The solution? Again, 1) higher taxes, 2) cuts in expenditures and/or promised benefits, or 3) default. The real question - can the debt just continue to expand forever, without collapsing? That is the assumption that our financial system relies on.
==========================
The debt is an asset to someone. Most of the debt is owed by the US government. Who is it owed to?
Systemic Debt as of 12/31/2011
TCMDO (includes debt held by public) 54,600 [1]
Intragov. Holdings 4,775 [2]
FERS (as of 9/30/2011) 5,792 [3]
Soc. Security unfunded 8,600 [4]
Medicare unfunded 5,300 [5]
-------
Total Systemic Debt 79,067
=======
Notes:
1. TCMDO, Q4 2011 from http://research.stlouisfed.org/fred2/series/TCMDO
2. Intragovernmental holdings, from http://www.treasurydirect.gov/govt/reports/pd/mspd/2011/opds122011.pdf.
3. Fed Employee and Vet Benefits Payable, as of 9/30/2011, from http://www.fms.treas.gov/frsummary/frsummary2011.pdf.
4. Social Security information as of 12/31/2011 from http://www.ssa.gov/oact/tr/2012/tr2012.pdf ("The open group unfunded obligation for OASDI over the 75-year period is $8.6 trillion in present value and is $2.1 trillion more than the measured level of a year ago.")
5. Medicare information as of 12/31/2011 from http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2012.pdf. ("The present value of future expenditures less future tax income, decreased by the amount of HI trust fund assets on hand at the beginning of the projection, amounts to $5.3 trillion. This value is referred to as the 75-year “unfunded obligation” for the HI trust fund, and it is significantly higher than last year’s value of $3.0 trillion.")
Now, what is the significance of this? This is pretty much all the debt in the system, both public and private, and the majority of all the debt in the whole world. I am not including unfunded portions of Medicare parts B or D, or Obamacare, because these do not have trust funds and so are not really entitlements. Although a lot of this debt is private, there is an implicit guarantee by the FedGov and FedReserve not to allow widespread defaults.
Debt must increase each and every year into infinity, or the economy is considered to be in a recession. So assuming an increase of 3%/year, that is about $2.4 trillion that the debt must increase every year. Of the total debt, about $44 trillion of this is private debt. The private sector has very little appetite for increasing its debt. Therefore the Federal debt (including unfunded liabilities) must increase by at least $2 trillion/year. Some of the federal funds are used to pay down the private debt.
The solution? Again, 1) higher taxes, 2) cuts in expenditures and/or promised benefits, or 3) default. The real question - can the debt just continue to expand forever, without collapsing? That is the assumption that our financial system relies on.
==========================
The debt is an asset to someone. Most of the debt is owed by the US government. Who is it owed to?
Type Owner/Beneficiary Debtor ------------ ------- -------- Private Debt Banks Private companies and households
Public Debt Bondholders US Gov.
Intragov Retirees/Recipients US Gov.
FERS Fed. Retirees US Gov.
Soc Sec unfund Retirees US Gov.
Medicare unfund Retirees US Gov.
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