Meltdown

[BachQ]

LINK

The Japanese market slumped more than 11% on Thursday, posting its biggest one-day fall since the 1987 stock market crash. ...  The benchmark Nikkei 225 index nose-dived 1,089 points or 11.4% to close at 8,458.5 and the broader Topix index fell 91 points or 9.5% to finish at 864.5.

[BachQ]

Two more government bailouts for Swiss bank powerhouses UBS and Credit Suisse.

The operation's scale underlines the continuing turmoil within the west's banking sector, with the Swiss banking commission and central bank forcing the two institutions to raise their capital ratios significantly. ... The Swiss authorities underlined the depth of the crisis by saying UBS had been hit by "massive" outflows of clients' money as investor confidence had crumbled. Marcel Rohner, UBS chief executive, said the markets had moved last month from "crisis mode" to "panic mode".

[BachQ]

First Iceland lurched toward the brink of collapse, now Pakistan faces bankruptcy.  And there's more: Ukraine, Hungary, and Serbia have entered emergency talks with the IMF (International Monetary Fund), igniting fears that a departure of foreign investors will catalyze a systemic financial crisis across Eastern Europe.  In the US, Jefferson County Alabama is nearing the brink, but has voted against filing for a record bankruptcy, and California is struggling to pay its bills.

[BachQ]

However, in Liverpool, England, everything is hunky dory when you visit LIVERPOOL ONE

Access All Areas on 1st October marked the first date that the entire 42 acres of shopping and leisure was fully accessible. You can now take advantage of 42-acres of retail and leisure heaven - great new shops, gourmet restuarants and a 14 screen ODEON as we revealed the highly anticipated Leisure Terrace, and the jewel in the crown - Chavasse Park - for the first time. 

One may wonder for how long this monstrosity will survive.

[ezodisy]

And there's more: Ukraine, Hungary, and Serbia have entered emergency talks with the IMF (International Monetary Fund), igniting fears that a departure of foreign investors will catalyze a systemic financial crisis across Eastern Europe.

Ah there's nothing quite like a little doom & gloom to get your day off to the perfect start The poor Hungarian Forint is taking a right kicking with both the Euro and Pound rising strongly against it. Things can only get worse.* On the upside Budapest is a charming city with lovely cakes and beautiful women and property prices are outstanding for a major European capital.

*don't fall in love with the downside until you're sure that it's never-ending 

The Karachi Stock Exchange. Just kick back light up and drift off.

See what I mean?

[Lilas Pastia]

A bailout with a difference: http://www.globeinvestor.com/servlet/story/GAM.20081016.RBANKSCMHC16/GIStory/

The canadian government stands to make a bundle with the plan.

[bwv 1080]

Oil price may hit $200 a barrel

Global demand for oil has been fuelled by China and India
The price of crude oil could soar to $200 a barrel in as little as six months, as supply continues to struggle to meet demand, a report has warned.

Goldman Sachs energy strategist Argun Murti made the warning as benchmark US light crude passed the $123 mark for the first time.

Surging demand was increasingly likely to create a "super-spike" past $200 in six months-to-two years' time, he said. Oil prices have now risen by 25% in the last four months and 400% since 2001.

US sweet, light crude hit an all-time peak of $123.53 (£63.25) on Wednesday, while London Brent crude jumped to $122.32.

Mr Murti correctly predicted three years ago - when oil was about $55 a barrel - that it would pass $100, which it reached for the first time in January of this year.

Chinese demand

Soaring global demand for oil is being led by China's continuing economic boom and, to a lesser extent, by India's rapid economic expansion.

 

Both are now increasingly competing with the US, the European Union and Japan for the lion's share of global oil production.

This additional demand comes at a time of continuing production problems in a number of oil-producing nations.

Production is down in Nigeria after the latest attacks on pipelines this week by anti-government militants, while Iraqi exports through the north of the country have been hit by renewed cross-border raids by Turkish forces against Kurdish insurgents.

Oil prices are also rising as the key US summer driving season approaches.

Economists warn that continuing high oil prices will impact on the global economy, hitting growth and fuelling inflation.

[bwv 1080]

Ten Internet Stocks That
Will Revolutionize the World

Broadcom Corporation (Nasdaq BRCM) is a leading developer of highly integrated silicon solutions that enable broadband digital transmission of video, voice, and data content to and throughout the home, as well as within the business enterprise. Broadcom's products enable the high-speed transmission of data over existing communications and infrastructures, most of which were not originally intended for digital data transmission.
Broadcom designs, develops and supplies integrated circuits (IC) for some of the most significant broadband communications markets.
This includes the markets for cable set-top boxes, cable modems, high-speed office networks, home networking, direct broadcast satellite, terrestrial digital broadcast, and digital subscriber lines (DSL). Broadcom was founded in 1991 by Henry T. Nicholas, III, Ph.D. and Henry Samueli, Ph.D., with the vision of providing broadband communications by leveraging their combined 35 years of communications IC experience.
Broadcom has a significant market share in cable modems, digital set-top boxes, high-speed networking and Fast Ethernet networking, and provides key technology and products in emerging broadband markets.
Broadcom has strategic customer relationships with 3Com, Nortel-Bay, Cisco Systems, General Instrument, Motorola, Panasonic and Scientific-Atlanta. Broadcom Corporation has placed itself in a strategic position to excel in all methods of broadband communications. Broadcom has reported earnings of 133% and 280% from a sales increase of 171% and 157% for the last two reported quarters. Company headquarters: Irvine, CA, phone: 949-450-8700. (Source: www.broadcom.com)

CMGI

CMGI (Nasdaq CMGI) is the recognized leader in the consumer e-commerce sector of the exploding Internet. CMGI represents the largest, most diverse network of Internet companies in the world. This network includes both CMGI operating companies and a growing number of synergistic investments through its venture capital affiliate, @Ventures. CMGI leverages the technologies, content and market reach of its extended family companies to foster rapid growth and industry leadership across its network, as well as the larger Internet economy.
CMGI started in 1968 as a list management and direct marketing business. Since then CMGI has built upon that core by creating or investing in a number of companies that engage in or support direct marketing on the Internet.
CMGI has used an innovative investment strategy much like a private venture capital company to create value for its shareholders. Its @Ventures Internet investment had development arm has yielded a significant return on investment since its inception in 1995. The combination of CMGI's majority owned operating companies and the @Ventures portfolio creates exceptional diversity and depth across key Internet sectors, which include e-commerce, infrastructure, content, and community companies.
CMGI earnings increased by 999% from a sales increase of 106% for the second quarter of 1999. Over the past five years, the share price of CMGI has rocketed by 19,476%. Company headquarters: Andover, MA, phone: 978-684-3832. (Source: www.cmgi.com)

Excite@Home Corporation

Excite@Home (Nasdaq ATHM) is a new media company poised to revolutionize the way people across the globe use the Internet to communicate, conduct business, capture information, and perform various transactions. The company is the result of a merger between Excite, Inc. and The At Home Network in January 1999.
The company has combined the Excite brand (one of the best known names on the Internet with 70% recognition among Web users) with the At Home Network. At Home's broad reach agreement with 21 cable companies worldwide is a source of continuing revenue.
Today the new company delivers its vision of "All Band, All Device, All the Time." Excite@Home is creating global media network centers by combining online content and navigational services with the distribution power of its broadband infrastructure. Management's goal is to provide a new site of advanced interactive services that continually captures the imagination of Internet users.
By leveraging the global reach of dial-up Internet access and the consistent growth of broadband, Excite@Home gives its customers the flexibility to move between services at different speeds, using different devicesall with one consistent interface.
At Home offers the choice of using a PC, pager, cellular phone, or television to access the services that cater to your specific needs and interests 24 hours a day. Excite@Home's second quarter earnings were up 120% on a sales increase of 665%. Company headquarters: Redwood City, CA, phone: 650-569-5000. (Source: www.home.net)

Global Crossing Ltd.

Global Crossing (Nasdaq GBLX) is the leading independent provider of fiber optic telecommunications systems. Global Crossing's mission is to develop, own and operate the world's first independent integrated global network in order to help satisfy the explosive demand for reliable, high quality undersea transmission capacity. Global Crossing is rapidly developing major fiber optic undersea cable systems and terrestrial facilities, to reliably and cost effectively connect the leading cities of the world.
The demand for telecommunications capacity is exploding. Within the past five years, Internet traffic has grown 86% per year, more than six times the growth rate of voice traffic.
Add to this the increasing global competition caused by continuing telecommunication privatization worldwide, and it becomes very clear that the industry is in the midst of a major evolution. While there has been significant demand for global telecommunications capacity, there has not been a corresponding growth in the number of new facilities, especially in the undersea fiber optic cable industry. Global Crossing has already begun to meet this challenge.
They have the additional undersea network capacity and faster response times, which will be required to satisfy current and anticipated growth in telecommunications traffic.
Management owns 70% of the company. Second quarter sales were up 88%. GBLX should post its first profit during the third quarter of 1999. Company headquarters: Bermuda, phone: 441-296-8600. (Source: http://206.132-184.108)

JDS Uniphase

Uniphase Corporation (Nasdaq JDSU) is a high technology company that designs, develops, manufactures and markets fiber optic telecommunications components, modules and laser subsystems. The company's telecommunications products include semiconductor lasers, high speed external modulators, transmitters, fiber Bragg gratings and optical modules for fiber optic networks in the telecommunications and cable television industries. The company's laser division produces laser subsystems for a broad range of original equipment manufacturers (OEM).
Applications include biotechnology, industrial process control, measurement, graphics, printing, and semiconductor equipment.
Uniphase Corporation is in the process of acquiring EPITAXX, Inc., a leading supplier of optical detectors and receivers for fiber optic telecommunications and cable television (CATV) networks. EPITAXX's products include long wavelength detectors and receivers that address a number of applications, including dense wavelength division multiplexing (DWDM) and SONET/SDH transmission, optical network monitoring for terrestrial and undersea networks, test measurement and fiber optic analog CATV.
The capability to supply advance detectors and receivers, both in component form and as part of integrated modules, is a very significant step for JDS Uniphase in expanding its "active" optoelectronic product lines.
With EPITAXX joining the JDS Uniphase family, JDS has built a powerhouse providing advanced products and technologies for the rapidly growing fiber optics telecommunications market. JDS Uniphase has produced a steady increase in sales and earnings for the last four quarters. During the most recent second quarter, earnings increased by 47% from a 68% sales increase. Company headquarters: San Jose, CA, Phone: 408-434-1800. (Source: www.jdsunph.com)

Lucent Technologies

Lucent Technologies (NYSE LU) is at the very center of a global communications networking revolution that is expected to total $650 billion by 2001. Lucent is among the worldwide leaders in the design, development and manufacturing of leading edge communications solutions. In this market Lucent delivers a wide range of public and private networks, communications systems and software, optical and data networking systems, business telephone systems, and microelectronic components.
Lucent holds the Number One market position in optical networking, U.S. switching systems, and U.S. wireless infrastructure equipment.
Customers include global service providers: Internet service providers; and private, public and government owned telephone companies around the world. Lucent also holds the Number One market position in messaging and in-building wiring systems, and is Number One in the U.S. market for business communications systems, call centers and wireless systems. The crown jewel for Lucent is Bell Labs, which is the innovation engine for Lucent Technologies.
More than any other private R&D institution, Bell Labs has helped weave the technological fabric of modern society.
It is the birthplace of the transistor, the laser and the communications satellite, and continues to make major technological advances, including Internet switching and transmission products and pace setting optical networking systems. Lucent Technologies is literally taking the world into the future. Lucent Technologies has a growth rate of 56% and a return on equity of 51%.
Over the last two reported quarters, earnings have increased 143% and 56% over the same period last year. Company headquarters: Murray Hill, NJ, phone: 908-582-8500. (Source: www.lucent.com)

MCI WorldCom

MCI WorldCom (Nasdaq WCOM) is a telecommunications industry leader that owns and operates its own networks in local cities across the U.S. and around the world. The company's unique set of assets allows its customers to combine voice and data traffic from local U.S. and international locations onto seamless, end-to-end networks. MCI WorldCom combines financial strength and a depth of resources to pursue the industry's best growth opportunities.
Operating in more than 65 countries, the company is a premier provider of facilities-based and fully integrated local, long distance, international and Internet services.
Through UUNET, the company has developed one of the most reliable and widely deployed Internet networks, as well as networking and hosting solutions around the world. The powerful UUNET backbone supports speeds ranging from 56 Kbps to OC-3 and provides local access from more than 1,000 locations worldwide. MCI WorldCom also offers virtual private networks (VPN), security, Web hosting and e-commerce services.
In global operations, MCI WorldCom has established itself as a local, facilities-based competitor in 16 countries, representing $533 billion or 76% of the $700 billion global telecommunications market.
MCI WorldCom just acquired Sprint in the largest merger ever. Sprint owns the most advanced wireless telecommunications network. MCI WorldCom reported that second quarter earnings increased by 114% on a sales increase of 247%. Company headquarters: Jackson, MS, phone: 601-360-8600. (Source: www.wcom.com)

Qualcomm

Qualcomm (NYSE QCOM) is an inventive wireless technology company which has been transforming the wireless communications industries since 1985. Qualcomm designs, develops, manufactures, markets, licenses and services some of the most advanced chipsets, system software, subscriber products, mobile information and management systems. As the pioneer and leading provider of CDMA (Code Division Multiple Access), the fastest growing wireless technology in the world, Qualcomm is uniquely positioned to offer innovative technology products and services for the wireless future.
Qualcomm has earned a distinguished reputation that goes beyond CDMA. Qualcomm was recently added to the S&P 500 Index, and Fortune's "100 Fastest Growing Companies."
Qualcomm is also included in Fortune's list of "100 Best Companies to Work for in America" and Industry Week's "100 Best Managed Companies." Qualcomm continues to lead the industry with the development of a versatile wireless data solutionHigh Data Rate (HDR), a high-speed, high capacity wireless technology. HDR unleashes Internet access by providing up to 2.4 Mbps in a standard 1.25Mhz channel bandwidth that is unprecedented in systems capable of fixed, portable, and mobile services.
Qualcomm's technology applications also include Ommi Tracs Mobile Information Management Systems, which provides transportation companies with an innovative and effective way of managing logistics.
Developed and manufactured by Qualcomm, Ommi Tracs is used in more than 35 countries on four continents and is the world's largest wireless data application. Qualcomm's earnings increased by 341% and 215% for the last two reported quarters. Company headquarters: San Diego, CA, phone: 619-587-1121. (Source: www.qualcomm.com)

Softbank

Since 1995, Masayoshi Son's Softbank Corp. (Nasdaq SFTBF) has made perhaps the savviest venture capital bet of all time by taking equity stakes in which are now the hottest sites on the Web. Yahoo, GeoCities, E*Trade, and E-Loan are just a few well-known Internet names. Son owns a piece of all of them. He has parlayed startup investments of nearly $2 billion into paper profits now worth over $15 billion.
In what might be the model for the global expansion of e-commerce, Son is binding together his 100-plus confederation of companies into a cyber-conglomerate that will expand into Asia and Europe.
At its core is Softbank, a sprawling empire in Japan and the U.S. that includes software, retailing, magazines, Web publishing, and computer trade show properties. With a market cap of $38 billion, Softbank exceeds that of Toshiba. Sons basic strategy is to import U.S. Web sites into Japan, where there is precious little experience in commercializing the Internet. The Japanese government is counting on e-commerce and business-to-business transactions as a means to lower Japans bloated price structure and spur a productivity surge.
Son and Softbank are leading the way and over time will destroy Japans "good ole boy" corruption network of price fixing.
Son is financing the development of Japans Nasdaq market system and is in the best possible position to capture the profits from the Internet revolution as it spreads into Japan, China and all of Southeast Asia, where one-third of the globes 6 billion people live and work. (Source: www.softbank.co.jp, Business Week)

Texas Instruments

Texas Instruments (NYSE TXN) is a global semiconductor company and the worlds leading designer and supplier of digital signal processing (DSP) and analog technologies, which are the engines driving the digitization of electronics. The companys businesses also include materials and controls, education and productivity solutions, and digital imaging. The company has manufacturing or sales operations in more than 25 countries.
Over the next few years, Texas Instruments expects to make major contributions to the critical technologies driving the digital revolution.
By integrating their capabilities in sensing, processing, transmission and display, Texas Instruments will provide important solutions that will help make its customers more competitive in global markets. Today Texas Instruments best scientists, engineers, mathematicians, computer scientists and technicians are exploring new scientific concepts to create products that are changing forever the way you live, learn, work, and play.
Texas Instruments continues to invest heavily in research and development, which will allow it to enhance its position of leadership and supporting growth in emerging global markets.
Through these investments, Texas Instruments is well positioned to dominate the worldwide demands of a $50 billion digital signal processing solutions market. Texas Instruments reported an earnings increase of 156% during the second quarter of 1999. Company headquarters: Dallas, TX, phone: 972-995-3773. (Source: www.ti.com)
Editors Note: Donald Rowe is editor of The Wall Street Digest, One Sarasota Tower, Ste. 602, Sarasota, FL 34236 1 year, 12 issues, $150. Published continuously since 1977, The Wall Street Digest is one of Wall Streets most widely read investment and financial publication for economic trends and investment direction. This highly-regarded advisory newsletter provides specific investment advice for stocks, bonds, mutual funds, precious metals, stock and bond markets.

[bwv 1080]

Economic Collapse Coming

The domino effect is the problem of falling systems. One system fails, but another is dependent on it. Like a series of gigantic rows of dominoes, each within falling distance of another, so is the y2k problem and its effects. No one can even guess what these effects will be. This is what makes y2k the most complex problem facing the world -- possibly ever.

Consider banking. Banks are threatened by y2k. Depositors will draw out cash. Then the system collapses. If a business cannot pay programmers because its bank is closed, it cannot complete its y2k repairs. When it fails, the firms it supplied are trapped by production shortages. Etc.

The domino effect is one gigantic "etc."

Scientists speak of the butterfly effect: when a butterfly in California flutters its wings, it sets up wind currents that may produce a tornado in Texas. (That's because just about anything can produce a tornado in Texas.) This is an analogy, of course. We can't test the truth of this hypothesis. But it will be easy to test the domino theory if there is a run by Japanese housewives on the unliquid Japanese banks in 1999. These banks will start selling the U.S. government debt that they hold in the hundreds of billions of dollars worth. Interest rates in the U.S. will soar. The dollar will fall. Meanwhile, the run will spread to other nations.

Who knows where it will start? Only one thing seems certain: it WILL start. And when it does, every market institution and every government will suffer enormous setbacks. (See the category, "Banking.")

Banking is the obvious domino. Here's another: shipping. What happens to cities if gasoline is unavailable to truckers? If the computers that control train schedules break down? If rail freight cars cannot be located by defective computers? Think about your supermarket's shelves.

What happens to production when "just in time production" becomes "bottleneck production"?

Here's another: farming. Modern commercial farming is tied to hybrid seeds. The plants produced by hybrid seeds produce seeds that will not produce healthy plants if planted. Every year, almost every large farm on earth must re-order another batch of hybrid seeds. If, for any reason, the seed companies fail, or the banks fail, farmers will not be able to plant anything. This will lead to a famine. Let's not hedge our words: FAMINE. There is no way today to get enough non-hybrid seeds into production in order to avoid this problem. If this is one of the dominoes, the result will be widespread starvation.

This is an unpleasant thought. Are you willing to order a year's supply of non-hybrid seeds today for a few dollars, just in case? If not, you do not understand y2k and the domino effect. You do not take it seriously.

Y2K is a systemic problem. It cannot be fixed. Whatever it's going to do, it will do. Deferral is the primary response when men face a problem they know they cannot solve. Deferral, in this instance, means resignation to systemic failure. "What's the use?" is a completely rational response to the magnitude of y2k. Too much of the breakdown is going to take place outside institutioonal, regional, and national borders. Money spent to fix your system is thrown away if few of those outside your organization are willing to spend money to fix their systems. Even this assumes that the systems can be fixed.

There is no precedent for a breakdown of this magnitude. It is not clear that money can solve the problem. There is overwhelming evidence that money cannot possibly solve it: there are too few y2k programmers worldwide. Money will only raise the price of programmers; it will not increase their supply in the time remaining. So, the money is not being spent at the local level. Y2K will not be fixed at the macro (system) level because it must be spent at the micro level. It will not be spent at the micro level unless there is a high probability of success for the organization. There is no reason to spend money at the micro level if the macro level will fail. There is overwhelming evidence that the money will surely be wasted: thrown down a y2k hole.

So, the money is not being spent, nor will it be spent. Desperate cries by y2k awareness specialists have led to only one institutional success story (maybe): Visa. But Visa's success will mean nothing in 2000 if the banks fail. Spending money at the micro level will accomplish nothing visible at the macro level. The y2k awareness lecturers are modern-day John the Baptists, crying in the wilderness.

All the programmers' cries of "this insight is not helpful" will not change the reality of this analysis. The money is not being spent. I have shown why. Furthermore, the cries of "we can fix it if we stick together" are bound to fail. We cannot "stick together," for there is no institutional means to "stick us together."

[ezodisy]

Oil price may hit $200 a barrel


Goldman Sachs energy strategist Argun Murti made the warning as benchmark US light crude passed the $123 mark for the first time.

Yeah the crooks made the prediction around May and then sold it, most likely. A week or two ago they came out with a $70 prediction which has just been realised.

[BachQ]

A bailout with a difference: http://www.globeinvestor.com/servlet/story/GAM.20081016.RBANKSCMHC16/GIStory/

The canadian government stands to make a bundle with the plan.

As the article notes, it's not really a "bailout" if the government turns a profit.

***

[The Government] is taking advantage of its ability to borrow cheaply to buy the mortgages, which will pay a higher rate of interest. The difference will be the government's profit. *** The purchases will be conducted by so-called reverse auction, where banks will essentially have to tell the government how much they will pay in the form of interest to move the loans off their balance sheets. The government will accept the most profitable bids.  ... The government will establish a minimum acceptable yield, or interest rate. That minimum is expected to be above the yield on comparable five-year Canada Mortgage Bonds that CMHC sells to investors. Banks are expected to place bids somewhere above the minimum, with more-stressed banks giving the government a better deal as they try to ensure they can raise cash.

Hopefully, the US Government will adopt Canada's version of a reverse auction (with an establilshed limit of available funds) when valuing the mortgages it purchases.  It strikes me as the best method all-around: given limited funds available for distribution, the reverse auction mechanism theoretically would encourage participants to bid down the mortgage assets to a fire-sale price.  Not sure whether Bernanke / Paulson favor this method, but in testifying to Congress,  Bernanke suggested that the banks would tender their assets for sale, and subsequently the Treasury would place a bid at what it considers "close to the hold to maturity price". WTF?  According to Forbes, Bernanke testified that the Government would purchase "illiquid mortgage-backed and mortgage-related securities at a price determined by a reverse auction process that has yet to be defined. ... neither Bernanke nor [Paulson] offered any details of exactly how the auction process would work. " Again: WTF?

The loans are solid, but by taking them off bank balance sheets in return for cash, the banks will theoretically be able to make new loans.

Obviously, the critical issue is whether the loans will remain solid.  In the US, many of the sub-prime and Alt-A mortgages are steaming piles of worthless paper.  If the mortgages remain solid throughout the life of the loan, then the government can indeed easily turn a decent profit over the longterm.  If, however, there is a dire global recession with rampant unemployment, then all bets are off, and that assumption of longterm profitability will evaporate.

[BachQ]

Economic Collapse Coming

The domino effect is the problem of falling systems. One system fails, but another is dependent on it. Like a series of gigantic rows of dominoes, each within falling distance of another, so is the y2k problem and its effects. No one can even guess what these effects will be. This is what makes y2k the most complex problem facing the world -- possibly ever.

Consider banking. Banks are threatened by y2k. Depositors will draw out cash. Then the system collapses. If a business cannot pay programmers because its bank is closed, it cannot complete its y2k repairs. When it fails, the firms it supplied are trapped by production shortages. Etc.

The domino effect is one gigantic "etc."

Scientists speak of the butterfly effect: when a butterfly in California flutters its wings, it sets up wind currents that may produce a tornado in Texas. (That's because just about anything can produce a tornado in Texas.) This is an analogy, of course. We can't test the truth of this hypothesis. But it will be easy to test the domino theory if there is a run by Japanese housewives on the unliquid Japanese banks in 1999. These banks will start selling the U.S. government debt that they hold in the hundreds of billions of dollars worth. Interest rates in the U.S. will soar. The dollar will fall. Meanwhile, the run will spread to other nations.

Who knows where it will start? Only one thing seems certain: it WILL start. And when it does, every market institution and every government will suffer enormous setbacks. (See the category, "Banking.")

Banking is the obvious domino. Here's another: shipping. What happens to cities if gasoline is unavailable to truckers? If the computers that control train schedules break down? If rail freight cars cannot be located by defective computers? Think about your supermarket's shelves.

What happens to production when "just in time production" becomes "bottleneck production"?

Here's another: farming. Modern commercial farming is tied to hybrid seeds. The plants produced by hybrid seeds produce seeds that will not produce healthy plants if planted. Every year, almost every large farm on earth must re-order another batch of hybrid seeds. If, for any reason, the seed companies fail, or the banks fail, farmers will not be able to plant anything. This will lead to a famine. Let's not hedge our words: FAMINE. There is no way today to get enough non-hybrid seeds into production in order to avoid this problem. If this is one of the dominoes, the result will be widespread starvation.

This is an unpleasant thought. Are you willing to order a year's supply of non-hybrid seeds today for a few dollars, just in case? If not, you do not understand y2k and the domino effect. You do not take it seriously.

Y2K is a systemic problem. It cannot be fixed. Whatever it's going to do, it will do. Deferral is the primary response when men face a problem they know they cannot solve. Deferral, in this instance, means resignation to systemic failure. "What's the use?" is a completely rational response to the magnitude of y2k. Too much of the breakdown is going to take place outside institutioonal, regional, and national borders. Money spent to fix your system is thrown away if few of those outside your organization are willing to spend money to fix their systems. Even this assumes that the systems can be fixed.

There is no precedent for a breakdown of this magnitude. It is not clear that money can solve the problem. There is overwhelming evidence that money cannot possibly solve it: there are too few y2k programmers worldwide. Money will only raise the price of programmers; it will not increase their supply in the time remaining. So, the money is not being spent at the local level. Y2K will not be fixed at the macro (system) level because it must be spent at the micro level. It will not be spent at the micro level unless there is a high probability of success for the organization. There is no reason to spend money at the micro level if the macro level will fail. There is overwhelming evidence that the money will surely be wasted: thrown down a y2k hole.

So, the money is not being spent, nor will it be spent. Desperate cries by y2k awareness specialists have led to only one institutional success story (maybe): Visa. But Visa's success will mean nothing in 2000 if the banks fail. Spending money at the micro level will accomplish nothing visible at the macro level. The y2k awareness lecturers are modern-day John the Baptists, crying in the wilderness.

All the programmers' cries of "this insight is not helpful" will not change the reality of this analysis. The money is not being spent. I have shown why. Furthermore, the cries of "we can fix it if we stick together" are bound to fail. We cannot "stick together," for there is no institutional means to "stick us together."

Y2K baby!   

[BachQ]

Excite@Home Corporation

Excite@Home (Nasdaq ATHM) is a new media company poised to revolutionize the way people across the globe use the Internet to communicate, conduct business, capture information, and perform various transactions.

Yeah, baby!  We're excited ......... about Excite@Home's demise.

[BachQ]

*don't fall in love with the downside until you're sure that it's never-ending 

I'm very tempted to incorporate this into my signature line .... 

[BachQ]

Katrina Again? US Gets Poor Grades For Credit Crisis

The US government's handling of the financial crisis is looking a lot like its reponse to Hurricane Katrina three years ago, say crisis management experts and former government officials. In this case, it's the economy that's under water—and people are losing their houses due to foreclosures, not flood waters.

The government was behind the curve from the start, these experts say. Communication was poor and organizational efforts were slow and often ineffective. "The government acted as if it was initially was on top of it and knew it was doing the right thing," says Jonathan Bernstein of Los Angeles-based Bernstein Crisis Management. "It came out later that they clearly didn't."  No one escapes blame either. Congress, President Bush, Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson and even  House Leader Nancy Pelosi—all made key mistakes, the pros say.  "As a result," Bernstein says, "far more damage occurred than if they had been honest, organized, compassionate and understood the threat and didn't get into a position to respond to it before it was too late."

(continued)

[BachQ]

Oil: One Last Head-Fake?

[BachQ]

Depressed Canadian oil giants ripe for takeover

"In case you didn't think there was money around, the super majors have lots," said Terry Peters, an analyst at Canaccord Adams, in a research note last week that riffed off an article in Petroleum Intelligence Weekly (PIW). "The super majors have money, motive and opportunity and some of our larger Canadian companies appear vulnerable."

[BachQ]

Oil dips below $75 as OPEC cuts demand forecast

Oil prices dipped below $75 a barrel Wednesday, a new 13-month low, as OPEC reduced its 2009 petroleum demand forecast amid signs that the global economy is headed for a severe downturn.

[BachQ]

Hard times are good times at the pawnshop LINK

At People's Pawn in Springfield, Mass., the collection of DVD players, televisions and other electronics just keeps getting bigger. As many as 200 a people a day come in to "sell all their stuff so they can get gas money," said Efren Rivera, who works at the shop. "Some people have to pay their mortgages."  The story is similar at EZ Cash Pawn in West Palm Beach, Fla., where the shelves are so stacked with electronics, musical instruments, guns, fishing poles, scuba gear — you name it — that people are being turned away. "I have no choice," said Robert DeSantis, the shop's owner. "I have tools in the warehouse now — every single tool you can think about."

[BachQ]

Apparently oblivious to the concept of peak oil, India is completing construction of a massive superhighway called the GQ (the "Golden Quadrilateral"), a 3,633-mile expressway linking India's 4 major population centers of Delhi, Mumbai, Chennai, and Kolkata:

It is part of the largest and most ambitious public infrastructure project in the country's history, one with a social engineering goal at its heart: Much as the U.S. interstate highway system mobilized American society and grooved the postwar economy, India hopes the Golden Quadrilateral will push the country's economic engine into overdrive—bringing the benefits of growth in its booming metropolises out to its impoverished villages, where more than half the population lives.