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Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:109:\"Declaration of views_handler_argument::init() should be compatible with views_handler::init(&$view, $options)\";s:5:\"%file\";s:86:\"/home/transiti/public_html/sites/all/modules/views/handlers/views_handler_argument.inc\";s:5:\"%line\";i:744;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:134:\"Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state)\";s:5:\"%file\";s:84:\"/home/transiti/public_html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:607;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:130:\"Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state)\";s:5:\"%file\";s:84:\"/home/transiti/public_html/sites/all/modules/views/handlers/views_handler_filter.inc\";s:5:\"%line\";i:607;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

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Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134

Warning: Table './transiti_db/watchdog' is marked as crashed and should be repaired query: INSERT INTO watchdog (uid, type, message, variables, severity, link, location, referer, hostname, timestamp) VALUES (0, 'php', '%message in %file on line %line.', 'a:4:{s:6:\"%error\";s:14:\"strict warning\";s:8:\"%message\";s:62:\"Non-static method view::load() should not be called statically\";s:5:\"%file\";s:63:\"/home/transiti/public_html/sites/all/modules/views/views.module\";s:5:\"%line\";i:906;}', 3, '', 'http://www.transitiontowns.org.nz/aggregator', 'http://www.transitiontowns.org.nz/', '123.150.107.28', 1418987240) in /home/transiti/public_html/includes/database.mysqli.inc on line 134
Feed aggregator | Transition Towns New Zealand Aotearoa

Feed aggregator

The Market Ticker - Sony, And The US, Have Surrendered

The Market Ticker - 19 December 2014 - 11:03am

You can surrender to terrorists two ways:

1. After they attack you.

2. When they threaten to attack you.

Sony pictures, and the United Stateshave now done the latter.

When did we become spineless?  Was it when we failed to prosecute our conflict in Korea, or was it when we won the Tet Offensive and then walked off the field and effectively surrendered in Vietnam -- after winning, not losing?  Let us remember that it was our media that was, to a large degree, responsible for painting a very false image of what had happened there.

Or was it after 9/11, when we knew there existed ties to Saudi Arabia -- including almost-certainly the government of Saudi Arabia, within days after the attacks -- and yet we not only did nothing in response at the time we continued to ignore the evidence of their involvement since and have bought literal trillions worth of their oil over the next decade and a half?

Whenever our emasculation happened we had better think long and hard about this.  Canceling a movie because a tin-pot dictator over in North Korea got pissed off and had his minions hack a company's computers (which, I might add, is a problem all on its own; gee, you don't think someone was more than a bit stupid to be leave themselves vulnerable to this, do you?) and then "threatened" attacks if mere speech occurred, that is, the showing of a movie, raises feelings of embarrassment for what is supposed to be a proud nation.

If we're going to be ball-less on a national level then I hope you're ready for the black flag of ISIS to fly over the White House -- and your house.

Let me remind you that cutting off heads is certainly more of a direct threat than anything Kim-Jun-Pigfucker could actually pull off in response to not liking a movie that's made about his nation and the rat-bastard conduct it has engaged in over the years.

Got your prayer mat ready comrade?

Categories: Economics

How to Make the Casinos Pay You for a Change

The Daily Reckoning - 19 December 2014 - 5:54am

This post How to Make the Casinos Pay You for a Change appeared first on Daily Reckoning.

Hooray! The stock market is saved!

Well, most of it. After yesterday’s broad advance, things are looking a lot less terrible. Except for one dismal sector…

Yesterday’s huge rally exposed the bottom-dwellers, which can’t find a place to hide from Mr. Market. None of these stocks can catch a bid these days. And we’re going to cut one of them out of your portfolio today.

You’ll be all smiles once you jettison this position for an easy double-digit gain. I’ll explain how you can collect your “winnings” in just a minute…

The charts for some of these guys are so terrible, you won’t find a hint of even the tiniest dead cat bounce. I mean, we’re talking about the gutter here. So, what sector do these charts belong to? Gaming stocks. That’s right—the major resorts and casinos are cratering. We’re gonna make them pay you for a change…

Casinos were actually one of my favorite longer-term plays for quite a while. The weekly charts were set up beautifully, with stocks like MGM Resorts International (NYSE:MGM) sporting perfect, orderly uptrends. If you bought MGM in late 2012 and sold this January, you would have walked away with a clean double. But today, your best bet is to walk away from gaming stocks entirely.

It’s a theme we’ve shared with you since April. And it’s only gotten worse. The gaming industry has come under all sorts of pressure–a situation I first noticed in the charts. The powerful, multi-year uptrends started showing cracks. And it wasn’t long before those cracks turned into gaping holes you could drive a friggin’ truck through. That’s where things stand today.

The slow death of Atlantic City tells the whole story. Just a few months ago, the $2.4 billion Revel Casino Hotel closed its doors after just two years of operation. The luxury resort was supposed to bring millions to the dying gambling town. Instead, its most famous moment involved a certain football player punching his wife in one of its elevators.

So why are the big gaming companies holding such bad hands these days?

Well, it’s a combination of two main factors. First, in a mad dash to secure more revenue, local and state governments around the country are legalizing gambling at a dizzying rate. It makes sense. Why let the state next door collect all that sweet tax money from casinos when you could have your own? Heck, Baltimore— home of yours truly— just opened a huge casino downtown near the stadiums to attract the suckers – I mean gamblers. And casinos like this one continue to poach customers up and down the East Coast from poor ol’ AC.

Slowing growth in China isn’t helping casinos, either. The gambling mecca of Macau is feeling the pinch. And just yesterday, we found out that China will start cracking down on illicit money channeled through casinos, according to Bloomberg. That’s another nail in the coffin for the already beaten-down gaming stocks.

Back in early September, I told you Wynn Resorts (NYSE:WYNN) had the best-looking short setup of any of the resort and casino stocks on the market. Since then, the stock has fallen more than 26%. It’s all part of a major breakdown in the sector. To see the big picture – and the handwriting on the wall for gaming stocks – look no further than the Market Vectors Gaming ETF (NYSE:BJK)…

BJK has sunk 18% since the beginning of September—and I don’t think it’s getting up off the mat anytime soon…

Regards,

Greg Guenthner
for The Daily Reckoning

P.S. Gaming stocks used to be among my favorites. Not anymore. If you want to cash in on the biggest profits the market has to offer, sign up for my Rude Awakening e-letter, for FREE, right here. Don’t miss out. Click here now to sign up for FREE.

The post How to Make the Casinos Pay You for a Change appeared first on Daily Reckoning.

Categories: Economics

How Low Will Oil Go – And What Can You Do?

The Daily Reckoning - 19 December 2014 - 5:48am

This post How Low Will Oil Go – And What Can You Do? appeared first on Daily Reckoning.

Last week, the price of oil broke below $60 per barrel, representing a $40+ discount since June.

The oil market has been under siege for six months. It’s been a bloodbath. And the blood is running in the streets more than ever today. From service providers to producers this downturn has been painful.

We’re witnessing a true “sky is falling” mentality in the shale space. Is it warranted? Where to from here? Let’s take a look…

The first caveat to today’s bottom-fishing oil alert is that we’ve known all along that oil prices were a little toppy over the summer. In fact, when asked just how low oil prices could go I usually answered with a simple “lower than you’d expect.”

Whelp, the elevator bell just rang and we’ve arrived! We’re officially at: “lower than you’d expect.” Heck we’ve got a front row seat to the blood and guts of “lower than you’d expect.” It’s painful to watch from an investor’s standpoint.

However, this is how markets work. Prices don’t stop where you think.

“Markets always over shoot because of the emotions of investors” my colleague Greg Guenthner (CMT) reminds us.

“When investors are euphoric and a stock price is going higher bad news doesn’t matter” he continues. “The same thing happens on the downside, when investors are fearful good news doesn’t matter.”

The market mentality behind a bubble is the same behind a crash. It’s important to remember the factors driving the crude market today aren’t rational supply and demand. Instead we’re dealing with emotions and speculations.

Heck, if oil prices were headed the other way today – say we were screaming to $150 a barrel – the talking heads would come out of the woodwork blaming speculators for high prices. “Blame the speculators!” Those SAME speculators (which I find no fault with) are pushing oil lower today.

That’s the point. The oil market, just like any other market, is full of emotion and speculation. That’s how markets work.

My takeaway for you today is not to get caught up in the hype.

Sure, take advantage of as much cheap heating fuel and gasoline as you can – that kind of hype is worth buying into. But don’t buy into the hype that oil is going to be insanely cheap for a long period of time.

That’s simply not the case…

Indeed, all we need right now is a little bit of time for this market to shake out. With emotions and speculators taking the reins here, the market has to shake out the weak hands. However, below the psychological $60 per barrel level we’re very close to that point (commonly called the “capitulation” point.)

So are we at a bottom here with prices below $60? I think we’re close, dear reader.

Simply put, rational supply and demand factors will take over soon. It’s the same thing we saw in early 2009. Past all of the fear and speculation on the downside, oil demand emerged and moved the market higher.

I’ll rest my cap on simple supply and demand taking over this market in due time. When energy gets this cheap – LOOK AT YOUR LOCAL GAS STATION – latent demand will start using it up, globally. And before long the price of oil will level out and return to a more rational supply and demand driven level. I see that level being closer to $80-85.

Same thing with supply…

Sub-$60 oil starts to price out a lot of oil production worldwide — oil sands, marginal offshore projects and some U.S. shale plays. So at the same time that latent demand is ramping up, marginal supply will leave the market.

Right now the action in crude oil is painful to watch as an investor, but with any market this fear-driven crash will subside and supply and demand will point us in the right direction.

Until then — keep your boots muddy,

Matt Insley
for The Daily Reckoning

P.S. Looking for a way to sidestep the talking heads and cut through the hype?  Sign up for a free subscription to Daily Resource Hunter today!

The post How Low Will Oil Go – And What Can You Do? appeared first on Daily Reckoning.

Categories: Economics

Cuba’s Berlin Wall Moment

The Daily Reckoning - 19 December 2014 - 5:35am

This post Cuba’s Berlin Wall Moment appeared first on Daily Reckoning.

We interrupt this week’s discussion on deflation briefly to bring you an important announcement from our colleague Paul Mampilly

“I have a selfie with the future Cuban ambassador!”

Recall, Paul and I traveled to Cuba three weeks ago.

“In five to ten years” I forecasted from the scene on November 17, “Cuba will be the hotspot for American tourists.’ Yesterday, it seemed like that call’s on track.  Ahead of schedule, even, thank you very much.

The incredulous looking fellow over Paul’s shoulder in the photo is the current U.S. Interests Section chief of mission, Jeffrey DeLaurentis. We visited the man’s home in Havana. He’s set to be the next ambassador, due to sweeping changes announced this morning.

Reuters reported: “U.S. to open embassy in Cuba”. Soon after, President Obama took to live T.V. to deliver one of his better speeches. There were three major changes…

  1. Diplomatic relations between both countries will be restored.
  2. Travel restrictions will be eased.
  3. U.S. credit and debit cards can be used in Cuba… larger money transfers can be made between them… U.S. financial institutions can open accounts there and more U.S. exports will be allowed into the island.

“We will end an outdated approach” preached Obama, “that, for decades, has failed to advance our interests and, instead, we will begin to normalize relations between our two countries,”

Only took fifty years for someone to say it… but hey, we’ll take what we can get.

“There’s going to be a party on the Malecon tonight” Paul commented over Skype, “and dancing in the streets.” That’s the well-lit road along Havana’s seawall where the city’s youth gathers at night.

“The young people don’t even know if Castro is alive” a Cuban woman who was part of the Revolution told us while we were there. “The don’t care about him.”

One young man — a twenty something amputee we met over a smoke at a club — illustrated the point to us. “Damn the Castros” he said, “I lost my leg as a child due to a treatable illness. If I had been born in the U.S. and gone to an American hospital, I’d have them both.”

Now that Cuba’s had it’s berlin wall moment, we can him picture him jumping, crutch and arm in the air, in celebration.

Traders on Wall Street celebrated too. Upon hearing Obama’s announcement, the didn’t waste any time… not even to stop and think.

As if on cue, the closed-end Herzfeld Caribbean Basin Fund rocketed up  46%. Never mind it’s holdings have little ties to Cuba… its ticker is CUBA.

The group owns assets that may prosper from an uptick in the Cuban “mojito economy” — like rum and cigars.

Two other, albeit indirect ways, you could bet on Cuba’s ascendance are Western Union (NYSE: WU )and TripAdvisor (NASDAQ:TRIP).

Western Union is already in Cuba. In fact, family remittances from Cuban Americans in Miami back to their homeland passed $3.5 billion in 2013. And yesterday, Obama increased the amount Cuban-Americans would be able to send.

As for TripAdvisor — an online review aggregator — I was stunned to see several restaurants in Havana asked us to give them positive reviews online. Already, Cuba’s been gearing up to cater to foreign tourists.

“The Caribbean Tourism Organization” reports Quartz, “shows that Cuba is the second-most visited island so far this year, with around 2,220,000 visitors from January to September. It trails only the Dominican Republic, which saw around 4,200,000 from January to October.”

Americans have been going to Cuba in record amounts as well. In 2007, about 49,000 Americans visited Cuba. 5 years later, 98,000 went. You can bank that number doubling again over the next five years and TripAdvisor will be the established place for Americans to map their vacation out.

“We’re planning a trip for the art biennal on May 22 or 23 if you are interested” Luly Duke, the founder of Fundacion Amistad, the non-profit that got us into Havana, emailed me last week.

It’s tempting… if only to keep you posted on the changes in Havana as they unfold.

It Only Took 50 Years…

“The human being is the only animal that stibles twice on the same stone” explained Miguel Coyula. “To see this, look at how many people remarry.”

It’s a long-standing tenet of these reckonings that “the empire has a logic all of its own”. The insight was laid down at length by our co-founders, Bill Bonner and Addison Wiggin in their books. We agree with that… but submit half a century of backing the same failed policy falls in the sheer stubbornness category.

Senor Coyula, a professor and Havana architectural historian seemed to agree. He lectured us on on Havana’s growth, stagnation and possible future from the Colonial era to present day.

Sounds stuffy… but it was well worth being cooped up in a hotel. Even on a sunny Havana day.

“I was invited to speak to the Congress and State Department about U.S.-Cuban relations. One of the questions I kept getting was, ‘What do you think of the embargo?’. I returned their question with a question.

“‘If you had a headache’ I said, ‘and the doctor recommended you take advil… and you keep taking advil for fifty years but the headache doesn’t go away, what should you do?’

“The Americans looked at me and said, ‘You should try something different.’”

Reasonable enough you may think. But suggest that to Florida republicans — many who are of Cuban descent… and you might have a shoe chucked at you.

“The sound you hear in the distance is Marco Rubio’s head exploding” our colleague and 5 Minute Forecast editor, Dave Gonigam quipped over IM this yesterday as we listened to Obama. “Radio Habana Cuba should be fascinating to listen to tonight.”

Google “Radio Habana” and you can listen yourself. Interesting stuff. It will give you a different perspective, at the very least.

I have jewish friends, if you’ll believe it, who don’t give two shekels about the holocaust. If you were born before 1960, you might be able to justify why we’ve had an embargo with Cuba for so long. We envy you, in that case, because we can’t.

We know the historical tit for tat…

Tit: The Cuban government ordered foreign refineries — two of which were American — to refine Soviet crude. The Treasury department, of all agencies, told American companies to refuse,  which they did.

Tat: Castro expropriated the refineries.

Tit: The U.S. cut off their Cuban sugar quota.

Tat: Castro nationalized all U.S. companies.

Tit: The soviets and Cubans team up, initially by buying and selling more sugar than they needed at inflated prices.

Tat: In October of 1960, the U.S. placed an embargo on all Cuban goods and services.

Tit: The bay of pigs happens.

Tat: Soviets try putting nuclear missiles in Cuba

And here we are…

Too simplistic, perhaps. No matter, to someone born as recently as me, the Cuban embargo has always seemed like a dinosaur. About as out of place as Soul Train and bell bottoms.

Yet, according to CNN’s Fareed Zakaria, “the older generation still retain this idea that they’re going to go back to a non-Castro Cuba. That they’re going to reclaim Cuba.”

Felix Gonzalez, a 76-year old Cuban-American that came to the States in 1961, called Obama’s announcement this morning a “betrayal,” “I don’t trust the Castro government,” he said. “I will never.”

From first-hand experience, we can tell you the younger Cubans in Cuba are a lot more practical. Or they just don’t care. It’s hard to know for sure.

These “issues were so much caught up with the Cold War” CNN’s Zakaria concluded. “All that is gone. Finally, in a sense, we’re catching up with what the reality is. There is an alternate strategy that more contact, more commerce will have the effect of softening, opening up the regime.”

As I wrote to you from Havana:

You’d think everything here is supposed to be driven by fear of the regime. Fear of jail… fear of losing your home… fear of being switched to a bad job. And maybe it is. But it doesn’t seem like anyone’s afraid. I expected the streets to be empty at night… for people to look sad… and for certain questions I ask not to be answered. The reality is very different.

People — especially young people — gather in the thousands at night along what’s called the Malecon — which is the sidewalk lining the several-mile-long sea wall. I walked up and down it several times yesterday, with a cigar.

The teenagers relax, talk, make out — all listening to modern music and wearing modern clothing. On the first night here, we drove along the Malecon on the way to the hotel. ‘These are the people who are going to change Cuba’ our American guide who’d been coming for fifteen years, told us…”

Throughout history we’ve had grand human experiments where geography separated two groups of people who were more or less shared customs, language and history. All that was different were their economic systems.

North and South Korea…

East and West Germany…

China and Hong Kong…

Cuba and Miami.

In each case people voted with their feet… sometimes, with their lives. The record of history is clear: People go where their money, talents, and rights are treated best.

Who was whisked out of West Germany and into East Germany?

Who crossed the DMZ to get from South Korea to North Korea?

Who risked life and limb floating on a door to depart Miami for Havana?

The embargo didn’t end yesterday dear reader, but it might as well have. Freedom is a bit like soda. One sip, and you want more and more.

For now, raise a glass of Havana Club and puff on your Partagas. To freedom in Cuba… however slowly!

Hasta luego,

Pete

for The Daily Reckoning

P.S. If you sign up to receiving the Daily Reckoning by e-mail, Addison and I will write to you each day. We pair our commentary and research on the day’s events with the in-depth analysis from one of our gurus, like Jim Rickards. Click here and enter your email address. We’ll send you your first reckoning tomorrow.

P.P.S.  Here are a few more pictures from my trip…

The post Cuba’s Berlin Wall Moment appeared first on Daily Reckoning.

Categories: Economics

The $4 LED Trend You Don’t Want to Miss

The Daily Reckoning - 19 December 2014 - 4:40am

This post The $4 LED Trend You Don’t Want to Miss appeared first on Daily Reckoning.

The opportunity to sell and install LEDs is enormous. We’re talking about over a billion lighting fixtures. And the areas with the largest potential — like parking lots — have barely begun to change.

While in Los Angeles, a CEO referred to this massive trend as “the LED curve.” It propelled his company’s sales up 266% in the first half of 2014. Yet the market hardly noticed, for a simple reason you’ll soon see.

Just take a look at the chart below…

Click to enlarge

This is the “LED curve.” Let me explain the huge profit potential of this curve.

LED stands for light-emitting diode. I’m sure you’ve heard of LEDs. For years, this was a hyped investment play. But the technology itself was not ready for prime time. Today, it is.

Why so transformative?

LEDs are the best source of lighting on the planet.

LEDs are different from traditional lighting.

The LEDs “are the size of a fleck of pepper” and use “a mix of red, green and blue… to make white light.” This according to a U.S. government website, which goes on to say:

“LEDs emit light in a specific direction, reducing the need for reflectors and diffusers that can trap light. This feature makes LEDs more efficient for many uses such as recessed downlights and task lighting. With other types of lighting, the light must be reflected to the desired direction and more than half of the light may never leave the fixture.”

LEDs also emit little heat. Incandescent bulbs release 90% of their energy as heat. Compact fluorescents lamps are not much better, at 80%. LEDs also last a really long time.

There is tons of stuff on this. Search the Web for “benefits of LEDs” and you get a staggering amount of material. I’ve only given you a small taste. I’m also skipping over the technical aspects of how it works.

This from the LIFX website:

“While incandescent lights last for a paltry 800-1,500 hours, and fluorescent lights last up to 10,000 hours, LEDs can last up to a staggering 60,000 hours.”

Using LEDs Saves a Ton of Money

For our purposes, though, what make LEDs especially interesting are the economic benefits of using them. Using LEDs saves a ton of money. Here’s a simple illustration I nabbed from Energy.gov:

Estimated cost of electricity to light a 6-foot tree for 12 hours a day for 40 days

Estimated cost of buying and operating lights for 10 holiday seasons 

Now, think about using LEDs to light parking lots… warehouses… office buildings. We’re talking billions of square feet of space. Many big companies have already made the switch. See the nearby graphic, which shows you that companies like Coca-Cola and Dollar General have already made the switch.

Switching to LED

The typical break-even for these corporate buyers is one-three years. After that, they enjoy a significant return on their investment in the form of lower lighting costs, saving them millions of dollars.

But it’s still early. The opportunity to sell and install LEDs is enormous. We’re talking about over a billion lighting fixtures. And the areas with the largest potential — like parking lots — have barely begun to change. Take parking, high bay and troffer — all lighting fixtures. Together, they represent about 10% of the LED market so far… but they represent 52% of the addressable market.

Click to enlarge

This huge ramp-up is the “LED curve,” a big sweeping rise ahead as the market must eventually address its lighting needs. The old stuff will burn out and need replacement. And then people will sit down and do the same math Coca-Cola and Toyota and everybody else is doing.

Then they’ll buy LED systems.

And that gets us to our opportunity…

A Turnaround That Could Triple Your Money

I met with the CEO and CFO of a very special LED company in Los Angeles at the LD Micro Conference. The company is at the tail end of a turnaround.

“Two years ago, we had a management change,” the CEO said. He stepped in as CEO in September 2012. He inherited a messy and expense-laden firm. “We got rid of the corporate jet,” he said, giving you a flavor of where the company was.

The CEO and his team refocused the business. They dedicated it solely to LED lighting. In the last two years, they’ve cut all kinds of noncore businesses — solar, wind, ice chilling, all kinds of things. Plant efficiency improved 67%. He sold businesses and bought new ones focused on LEDs.

So here we are at the inflection point, the “tipping point,” as the CEO called it. “Now LED has become economically viable [and] economically justified, and the quality of light is better.”

And his LED business is on fire. Sales, as I mentioned, were up 266% in LED lighting. And past results still reflect businesses that the CEO closed and doesn’t have anymore. Plus there was an acquisition. So when you look at the results overall, you see nothing that gets you excited. If anything, the surface numbers for the first half of fiscal 2015 are ugly compared with 2014. But those numbers miss the big picture of the LED curve.

His stock is just $4.48 per share as I write.

Once the LED sales start to drive the overall results and its eye-popping growth becomes apparent, his stock ought to command a market multiple of at least around 15 times earnings.

Using those earnings estimates and slapping a 15 multiple on them gets you $6.60-16.65 per share. We could make three times our money in a few years on the high side of that estimate.

There are some downsides. If the CEO is wrong (or lying) he’d have to come to the market to raise money, probably by selling stock. That would drive the shares lower. Maybe 30% lower, I don’t know. Let’s call it 30%.

But if they are right, the upside is tremendous. There aren’t many times when you can legitimately map out a three- or four-bagger over a three-year period. This company could do that.

Besides, I’m not sure they’ll need the money. They have a cash balance of $11 million as of September. They also have targets for further expense cuts, an 11% reduction. So I think there is a good chance they can get past FY2015 without needing cash. By that time, the stock will be a lot higher, the profits will be rolling in and they will have more options available to them.

Finally, I want to say that technology matters in this business. It’s all about what cost savings you can deliver to your customers. And this company seems to be in a good competitive position. It has a rich patent portfolio of some 50 patents and another 41 pending. Many of its products operate at lower costs than competitors’.

When you include installation times and other factors, this company comes out even further ahead. Management walked through one example where they could install an office troffer (a kind of light fixture) in about one minute with no tools, versus a much more complex and time-consuming process used by competitors. The CEO also said his was the only company with a five-day shipping guarantee.

In summary, this is a business at the tail end of a transition from a clunky industrial to a high-growth LED company. We can already see this happening before our eyes. It just doesn’t screen well… yet. But soon it will be impossible to ignore the growth.

Now is the time to ride the LED curve, and this is the company to do it with.

Oh, and I almost forgot. Insiders have been buyers in the low $4 range back in May. That’s a good sign for us.

Sincerely,

Chris Mayer
for The Daily Reckoning

The post The $4 LED Trend You Don’t Want to Miss appeared first on Daily Reckoning.

Categories: Economics

The Market Ticker - The Amusing Idiocy Of "Classic" Reviews

The Market Ticker - 19 December 2014 - 2:33am

I have to chuckle at what passes for journalism when it comes to tech these days.

Such as this "panning" review of the BlackBerry Classic.

Browsing the web is easier on the Classic than on previous models, but it is still a lousy experience when compared to the iPhone or Android devices. By far the biggest problem is still the chronic lack of apps. The range on offer from the Amazon and BlackBerry app stores is still incredibly poor. Want to check in for your Delta flight or work out how to get to your next meeting on public transport? Forget it.

Oh really?

Well, let's dispel a few stupids, particularly the above one.

Why do you want a "Delta" app?

You want one on your Android device because the browser sucks so badly that you can't just use their web site like you would at your desk.

But -- the BlackBerry 10 browser is excellent, including HTML5 compliance.  It therefore works just fine for that purpose, and what's better is that unlike the "Delta" app it works for all the airlines instead of just one!

Never mind not needing to clog up your device with a whole bunch of different apps (for the different carriers.)

But this misses the essential point, which is what BlackBerry has accomplished when it comes to travel, as just one example.

So let's say you do book a flight on your browser using the phone, or get a boarding pass (that's emailed to you, or you save as a PDF.)  BlackBerry Travel will automatically pick that up and start tracking it, showing you the gate the flight comes into on the other end (or where it's leaving from), sometimes more-quickly than the board changes in the airport itself!

Or let's say you're traveling by car.  You book a hotel.  Travel picks it up off the emailed confirmation all on its own and gives you one-touch routing via the mapping software in the handset; push a button and drive with it guiding you by voice.

Neither Android or IOS offers that sort of integration -- the sort that saves you time.

Oh sure, you can punch in the address of the hotel on any phone, but with the BB10 handsets you don't have to because the phone scans your email, finds anything travel related and populates it for you.  When it comes to hotels it will also look in the immediate surrounding area and suggest that you consider changing your reservation if a cheaper option exists across the street -- and it frequently does!

10.3.1, which is shipping with the Classic and will be officially available for the other BB10 devices shortly (it's already available if you're willing to handload it) continues to make major improvements over what originally showed up as "BB10."  Among other things Android app notifications now come through in the Hub and background operation is supported for them (and equally importantly you can choose to disable it on a per-app basis!)  One of the big complaints about Android apps that have a "background" component has always been that they chew up your battery at a ridiculous rate; only BB10 lets you choose to block execution when the app is in a tile rather than having focus -- and stop that.  With Android your only choice is to not have the app at all.

The key take-away to focus on is "why do I need an "app" for each hotel chain and airline when the browser is perfectly competent to handle it?"

I don't.

Or, if you prefer, "What would you say in response if Microsoft told you that you needed an 'app' for Delta to book a flight on your DESKTOP computer?"  I suspect your answer would be a one-finger salute.

What I do need in a PDA-cum-smartphone is a cross-company travel management package so that my flight, rental car and hotel data is all in one place irrespective of which company is providing each service to me on a trip and I get that with BlackBerry as it's built in and has been since the original BB10 launch.

99% of the time when I go somewhere I drive rather than fly, but the point is the same.  I just got back from a 3,000 mile driving trip about a week ago and when I booked each hotel BlackBerry Travel picked it up automatically, offering to route me there with the push of a button -- and when I asked it to do so the phone's nav system flawlessly delivered me to the front vestibule to check in.

Incidentally, this is not unique to the Classic or Passport.  It's been true since the Z10 launched.

Try that with the stock software that comes with your Android or Apple handset.

You can't -- and that's just one of the many examples where the FT article misses the mark.

Categories: Economics

Food Tank's 2014 Winter Reading List

Energy Bulletin - 19 December 2014 - 1:31am

Whether you are sitting on the beach, stuck at the airport, or cuddled up next to the fire this winter, these 18 books can help satisfy your mind, soul, and stomach.

Categories: Peak oil news

Falling Oil Prices Could Rock Canada's Politics

Energy Bulletin - 19 December 2014 - 12:38am

What do the plummeting oil prices tell us not only about our near term economic future in Canada, but the political fragility of the world's petro states?

Categories: Peak oil news

The Market Ticker - Oh Really?

The Market Ticker - 19 December 2014 - 12:15am

I have to laugh...

So desperate to stand out in a sea of phablets, BlackBerry went wide with the Passport -- too wide. The Passport sports a very heavy and awkward square design that's pretty much impossible to use with one hand. And while the keyboard is big and cushy, it's simply not worth the trade-off to carry a tank in your pocket. Add in buggy performance and a camera that takes its sweet time focusing and it’s easy to see why I called this device the New Coke of smartphones. The newer BlackBerry Classic, with its more traditional design, looks more satisfying for CrackBerry addicts.

So let me see if I get this right.

A device is a flop if it sells out repeatedly and the company that makes it cannot deliver for a couple of weeks at a time.  That is, unless it's Apple, in which case it's a good thing.  If it's BlackBerry it's a bad thing.

Oh, and as "not worth the trade-off", uh, I disagree, having had to wait for a restock to get one in my hands.  Hands-down it's the nicest smartphone I've ever had, for the first time living up to the promise of reducing the amount of time I spend on various tasks instead of simply tempting me to play Angry Birds Seasons.

As for the Classic, I suspect that's going to be a big hit too; announced yesterday right on schedule.  And speaking of schedule, that's one thing Chen is doing as their CEO since he took over -- he's putting up targets and then hitting them.

We'll see if that continues on Friday with earnings.

I suspect it will.

Categories: Economics

Review: Degrowth – A Vocabulary for a New Era

Energy Bulletin - 18 December 2014 - 11:59pm

Before anything else it seems important to say that there are lots of chapters in this book that I think are quite excellent as short pithy descriptions of the key concepts of degrowth.

Categories: Peak oil news

Breaking: Cuomo Bans Fracking in New York State

Energy Bulletin - 18 December 2014 - 11:58pm

In a victory for environmental, health and community activists, fracking has been banned in New York state.

Categories: Peak oil news

Peak Oil Notes - Dec 18

Energy Bulletin - 18 December 2014 - 11:57pm

Most observers are saying the pause in the rapid decline in oil prices is mostly techincial and that lower prices still are expected.

Categories: Peak oil news

Results from the Transition Culture survey

Transition Culture - 18 December 2014 - 11:18pm

A few weeks ago we asked you for your thoughts, via a short survey, on the Transition Culture blog.  We thought we would share the responses with you, as well as some reflections on what we might do about them. In total 56 of you responded, and we're very grateful for your input.  So, the first question was how long people have read the blog for ... 

Key outcome here is that most readers have been with us for a while, with only a handful, 19%, having read it for anything less than 3 years.  Clearly some work to do here getting new readers in, although always reassuring to know that longer-terms readers are sticking around!

We also wanted to know who people were who were reading the blog.  Were they active in Transition?

By far the majority, 75%, were active Transitioners.  We recently introduced monthly themes, so the next question wanted to know whether this was working for people or not: 

Nobody said they didn't like it, and 73.36% said it worked for them.  We also asked for suggestions for new themes.  Suggestions included values, bioregional economies, wellbeing vs GDP, partnering with others to develop Transition (which is, oddly, our first theme for 2015!), "business skills for hippy dippies", successful ways to engage, inspire, and keep volunteers energized, "Localisation - to cover, link all the themes and talk in an integrated way".

Next we wanted to know whether we are drowning people in too much content, too little, or just right:

We were relieved to see that only 1.82% found it "completely overwhelming", while 56.36 found it "about right".  Comments included "mostly about right, but on occasions i cannot keep up" and "only look from time time. So don't know".  Only a rather masochistic 9.09% felt there "could be more" content.  Fortunately nobody felt it to be "disappointingly low".  We would have felt a bit concerned for them.

Next we looked at the actual articles we post:  

72.22% felt the current length of articles to be "about right", and 14.81% felt them to be too long.  Comments included "a good mix of heavy and light stuff", "not focussed enough on real action", "I enjoy the variety", "a bit long when it's not your mother language", "i enjoy the personal perspectives sometimes, the range of topics and interviews. Appreciate having transcriptions as well as recordings, as I can't always listen", "see that for many it's probably about right but I'd like to see more concrete detail and evaluation" and "a pleasingly diverse mix of academic, personal view and political".  

Every month we spend days creating our 'Round Up of What's Happening Out in the World of Transition' feature.  We always wonder, as is generates so few comments, whether anyone actually reads it.  So we asked:  

23.64% always read it, and 58.18% sometimes read it.   We plan for 2015 to shake this up a bit, more detail to follow in the New Year.  Then we asked people what they like reading:

Most popular were interviews, case studies and practical tips, and least popular were videos (which I thought was interesting), The Transitioners' Digest and guest blogs.  The video thing was interesting because much of the accepted wisdom web-wise is that everyone's attention spans are shot to bits, and given the Facebook-isation of everything, videos are the way to go.  But clearly you lot aren't that bothered.  Which is kind of heartening.  

Lastly we asked for your thoughts on what else we could do to improve the site for you.  Here's a selection of the responses: 

  • It very important to be active doing stuff! However after reading George Marshall's book Don't Even Think About It And others we need to find better ways of changing the publics mind set.
  • While I've ticked lots of answers which suggest that I view the blog positively I don't read it at as much as I used to. I now visit once every few weeks, maybe once a month, just have a quick look through and read anything that catches my eye. Previously I would visit regularly, often daily, 'what is Rob thinking about today?'. Now I think it is much less personal and perhaps that is why I treat it more like an information source. I am not keen on the presentation/layout but I'm afraid I can't tell you why - it is clearly just emotional!
  • The blog is really my cup of tea but I would find it most interesting to read about difficulties that arise in the work of transition initiatives and what you can learn from them.
  • Local Government councillors experience of Transition initiatives, positive and negative.
  • I think it is pretty good as it is. Plenty of evidence based argument.
  • Interestingly (well, interesting to me!) I moved away from reading the blog so much when it felt like it was less of an immediate response by Rob to what is happening, and became more themed. Now this is probably not true for anyone else (and I'm sure Rob has not changed his style!) but just thought I'd feed in the feeling that a sense that a blog is one person's immediate response to the world (e.g. Lesley Riddoch's podcasts) may be the crucial ingredient (apart from excellence, which is already a key ingredient!)
  • The blog is great - it's mostly just that I don't have enough time to read it! Not sure what you can do about that!
  • Fine as it is
  • I am retired and the blog takes longer than I can fit in, fantastic blog but help me find the time.
  • The amount and type of articles changes month by month. It might be an idea to have one post every three days.
  • I preferred it without the guest blogs when it was just Rob writing under Transition culture. I used to read it more then but now very rarely look at it. I liked the personal aspect and am less keen on the "Transition speaking" approach now (but as I don't read it much any more, I may not really know how it works these days). 
  • Shorter articles are more accessible from my point of view. And not too much criticism - it's better when it's quite upbeat and more "transitiony" ie about solutions, positive things we can do, things that can inspire all of us to keep going in our Transition work and better understand why we are doing it, and how we can make a difference.
  • I preferred it as Transition Culture. simpler, clearer, easier to search for past articles. easier to point people to as it does not have background distractions that may not be relevant or right tone for some readers. Most of all TN site sign-up baffles me. too many passwords in my life!
  • Perhaps a regular (weekly?) links section to articles from around the web that the authors found interesting/illuminating
  • The blog is great. The frequency could be reduced slightly with a reduction in workload for Rob/the team.
  • It's always a good read. Prefer non activist topics that don't alienate
  • Works for me :)
  • The best articles are the ones written with passion and integrity. They are often very insightful and thought provoking.
  • I read at least 80% of what you write so feels like it's just right to me! Thank you for keeping it up so consistently Just fine as is, keep putting it out, keeps us connected.
  • Not sure it can be improved for me... thanks Rob
  • Keep it coming! i like that you include your personal experience at times, Rob, as in the review of This Changes Everything. It's good to read about how you and other bloggers sustain passion and energy.
  • Could improve typography and design and try maybe delivering entire post to my inbox.
  • Focus on in-depth quality content rather than volume
  • More follow up on tricky and broad issues ?

Some reflections

It's very useful to stop and reflect in the way a survey like this allows.  First thing to say is it's important not to read to much into it, given that the sample of respondents was so small.  Secondly, there are a few changes we'll be making to the site in the New Year.  We'll be giving themes two months, to give them a bit more space to breathe.  We'll be introducing some more magazine-style features, such as our 'Transition Agony Aunt' feature (any questions to send her?) and our 'One Minute Reviews'.  

As our Communications Strategy comes together, we hope that that will address some of the issues around attracting new readers to the blog.  We will have an announcement early in the New Year about how we are going to re-imagine the monthly Round Up.  In terms of those who still long for Transition Culture's original WordPress format, we willbe redesigning TransitionNetwork.org during 2015, so your comments are very useful for that discussion. 

There is much here that we will reflect on over the coming weeks and months, that will really help to shape what we create for the blog in 2015.  We'd like to thank everyone who chipped in and shared their thoughts.  

Categories: TT news

Déjà Vu All Over Again

Energy Bulletin - 18 December 2014 - 10:10pm

Every square on the bingo card marked “economic debacle” has been filled in with a pen dipped in fracking fluid.

Categories: Peak oil news

The Market Ticker - Bill Still To Be On Reddit AMA

The Market Ticker - 18 December 2014 - 3:41pm

Thursday (tomorrow, 12/18), 20:00 ET

Categories: Economics

Déjà Vu All Over Again

The Archdruid Report - 18 December 2014 - 1:28pm
Over the last few weeks, a number of regular readers of The Archdruid Report have asked me what I think about the recent plunge in the price of oil and the apparent end of the fracking bubble. That interest seems to be fairly widespread, and has attracted many of the usual narratives; the  blogosphere is full of claims that the Saudis crashed the price of oil to break the US fracking industry, or that Obama got the Saudis to crash the price of oil to punish the Russians, or what have you.
  I suspect, for my part, that what’s going on is considerably more important. To start with, oil isn’t the only thing that’s in steep decline. Many other major commodities—coal, iron ore, and copper among them—have registered comparable declines over the course of the last few months. I have no doubt that the Saudi government has its own reasons for keeping their own oil production at full tilt even though the price is crashing, but they don’t control the price of those other commodities, or the pace of commercial shipping—another thing that has dropped steeply in recent months.
What’s going on, rather, is something that a number of us in the peak oil scene have been warning about for a while now. Since most of the world’s economies run on petroleum products, the steep oil prices of the last few years have taken a hefty bite out of all economic activities.  The consequences of that were papered over for a while by frantic central bank activities, but they’ve finally begun to come home to roost in what’s politely called “demand destruction”—in less opaque terms, the process by which those who can no longer afford goods or services stop buying them.
That, in turn, reminded me of the last time prolonged demand destruction collided with a boom in high-priced oil production, and sent me chasing after a book I read almost three decades ago. A few days ago, accordingly,  the excellent interlibrary loan service we have here in Maryland brought me a hefty 1985 hardback by financial journalist Philip Zweig, with the engaging title Belly Up: The Collapse of the Penn Square Bank. Some of my readers may never have heard of the Penn Square Bank; others may be scratching their heads, trying to figure out why the name sounds vaguely familiar. Those of my readers who belong to either category may want to listen up, because the same story seems to be repeating itself right now on an even larger scale.
The tale begins in the middle years of the 1970s, when oil prices shot up to unprecedented levels, and reserves of oil and natural gas that hadn’t been profitable before suddenly looked like winning bets. The deep strata of Oklahoma’s Anadarko basin were ground zero for what many people thought was a new era in natural gas production, especially when a handful of deep wells started bringing in impressive volumes of gas. The only missing ingredient was cash, and plenty of it, to pay for the drilling and hardware. That’s where the Penn Square Bank came into the picture.
The Penn Square Bank was founded in 1960. At that time, as a consequence of hard-earned suspicions about big banks dating back to the Populist era, Oklahoma state banking laws prohibited banks from owning more than one branch, and so there were hundreds of little one-branch banks scattered across the state, making a modest return from home mortgages, auto loans, and the like. That’s what Penn Square was; it had been organized by the developer of the Penn Square shopping mall, in the northern suburbs of Oklahoma City, to provide an additional draw to retailers and customers. There it sat, in between a tobacconist and Shelley’s Tall Girl’s Shop, doing ordinary retail banking, until 1975.
In that year it was bought by a group of investors headed by B.P. “Beep” Jennings, an Oklahoma City banker who had been passed over for promotion at one of the big banks in town. Jennings pretty clearly wanted to prove that he could run with the big dogs; he was an excellent salesman, but not particularly talented at the number-crunching details that make for long-term success in banking, and he proceeded to demonstrate his strengths and weaknesses in an unforgettable manner. He took the little shopping mall bank and transformed it into a big player in the Oklahoma oil and gas market, which was poised—or so a chorus of industry voices insisted—on the brink of one of history’s great energy booms.
Now of course this involved certain difficulties, which had to be overcome. A small shopping center bank doesn’t necessarily have the financial resources to become a big player in a major oil and gas market, for example. Fortunately for Beep Jennings, one of the grand innovations that has made modern banking what it is today had already occurred; by his time, loans were no longer seen as money that was collected from depositors and loaned out to qualified borrowers, in the expectation that it would be repaid with interest. Rather, loans were (and are) assets, which could (and can) be sold, for cash, to other banks. This is what Penn Square did, and since their loans charged a competitive interest rate and thus promised competitive profits, they were eagerly snapped up by Chase Manhattan, Continental Illinois, Seattle First, and a great many other large and allegedly sophisticated banks. So Penn Square Bank started issuing loans to Oklahoma oil and gas entrepreneurs, a flotilla of other banks around the country proceeded to fund those loans, and to all intents and purposes, the energy boom began.
At least that’s what it looked like. There was a great deal of drilling going on, certainly; the economists insisted that the price of oil and gas would just keep on rising; the local and national media promptly started featuring giddily enthusiastic stories about the stunning upside opportunities in the booming Oklahoma oil and gas business. What’s more, Oklahoma oil and gas entrepreneurs were spending money like nobody’s business, and not just on drilling leases, steel pipe, and the other hardware of the trade. Lear jets, vacation condos in fashionable resorts, and such lower-priced symbols of nouveau richesse as overpriced alligator-hide cowboy boots were much in evidence; so was the kind of high-rolling crassness that only the Sunbelt seems to inspire. Habitués of the Oklahoma oilie scene used to reminisce about one party where one of the attendees stood at the door with a stack of crisp $100 bills in his hand and asked every woman who entered how much she wanted for her clothes: every stitch, then and there, piled up in the entry. Prices varied, but apparently none of them turned down the offer.
It’s only fair to admit that there were a few small clouds marring the otherwise sunny vistas of the late 1970s Oklahoma oil scene. One of them was the difficulty the banks buying loans from Penn Square—the so-called “upstream” banks—had in getting Penn Square to forward all the necessary documents on those loans. Since their banks were making loads of money off the transactions, the people in charge at the upstream banks were unwilling to make a fuss about it, and so their processing staff just had to put up with such minor little paperwork problems as missing or contradictory statements concerning collateral, payments of interest and principal, and so on. 
Mind you, some of the people in charge at those upstream banks seem to have had distinctly personal reasons for not wanting to make a fuss about those minor little paperwork problems. They were getting very large loans from Penn Square on very good terms, entering into partnerships with Penn Square’s favorite oilmen, and in at least some cases attending the clothing-optional parties just mentioned. No one else in the upstream banks seems to have been rude enough to ask too many questions about these activities; those who wondered aloud about them were told, hey, that’s just the way Oklahoma oilmen do business, and after all, the banks were making loads of money off the boom.
All in all, the future looked golden just then. In 1979, the Iranian revolution drove the price of oil up even further; in 1980, Jimmy Carter’s troubled presidency—with its indecisive but significant support for alternative energy and, God help us all, conservation—was steamrollered by Reagan’s massively funded and media-backed candidacy. As the new president took office in January of 1981, promising “morning in America,” the Penn Square bankers, their upstream counterparts, their clients in the Oklahoma oil and gas industry, and everyone else associated with the boom felt confident that happy days were there to stay. After all, the economists insisted that the price of oil and gas would just keep rising for decades to come, the most business-friendly and environment-hostile administration in living memory was comfortably ensconced in the White House; and investors were literally begging to be allowed to get a foot in the door in the Oklahoma boom. What could possibly go wrong?
Then, in 1981, without any fuss at all, the price of oil and natural gas peaked and began to decline.
In retrospect, it’s not difficult to see what happened, though a lot of people since then have put a lot of effort into leaving the lessons of those years unlearnt.  Energy is so central to a modern economy that when the price of energy goes up, every other sector of the economy ends up taking a hit. The rising price of energy functions, in effect, as a hidden tax on all economic activity outside the energy sector, and sends imbalances cascading through every part of the economy. As a result, other economic sectors cut their expenditures on energy as far as they can, either by conservation measures or by such tried and true processes as shedding jobs, cutting production, or going out of business. All this had predictable effects on the price of oil and gas, even though very few people predicted them.
As oil and gas prices slumped, investors started backing away from fossil fuel investments, including the Oklahoma boom. Upstream banks, in turn, started to have second thoughts about the spectacular sums of money they’d poured into Penn Square Bank loans. For the first time since the boom began, hard questions—the sort of questions that, in theory, investors and bankers are supposed to ask as a matter of course when people ask them for money—finally got asked. That’s when the problems began in earnest, because a great many of those questions didn’t have any good answers.
It took until July 5, 1982 for the boom to turn definitively into a bust. That’s the day that  federal bank regulators, after several years of inconclusive fumbling and a month or so of increasing panic, finally shut down the Penn Square Bank. What they discovered, as they dug through the mass of fragmentary, inaccurate, and nonexistent paperwork, was that Penn Square had basically been lending money to anybody in the oil and gas industry who wanted some, without taking the trouble to find out if the borrowers would ever be able to repay it. When payments became a problem, Penn Square obligingly loaned out the money to make their payments, and dealt with loans that went bad by loaning deadbeat borrowers even more money, so they could clear their debts and maintain their lifestyles.
The oil and gas boom had in fact been nothing of the kind, as a good many of the firms that had been out there producing oil and gas had been losing money all along.  Rather, it was a Ponzi scheme facilitated by delusional lending practices.  All those Lear jets, vacation condos, alligator-skin cowboy boots, heaps of slightly used women’s clothing, and the rest of it? They were paid for by money from investors and upstream banks, some of it via the Penn Square Bank, the rest from other banks and investors. The vast majority of the money was long gone; the resulting crash brought half a dozen major banks to their knees, and plunged Oklahoma and the rest of the US oil belt into a savage recession that gripped the region for most of a decade.
That was the story chronicled in Zweig’s book, which I reread  over a few quiet evenings last week. Do any of the details seem familiar to you? If not, dear reader, you need to get out more.
As far as I know, the fracking bubble that’s now well into its denouement didn’t have a single ineptly run bank at its center, as the Oklahoma oil and gas bubble did. Most of the other details of that earlier fiasco, though, were present and accounted for. Sky-high fuel prices, check; reserves unprofitable at earlier prices that suddenly looked like a winning deal, check; a media frenzy that oversold the upside and completely ignored the possibility of a downside, check; vast torrents of money and credit from banks and investors too dazzled by the thought of easy riches to ask the obvious questions, check; a flurry of drilling companies that lost money every single quarter but managed to stay in business by heaping up mountains of unpayable debt, check. Pretty much every square on the bingo card marked “ecoomic debacle” has been filled in with a pen dipped in fracking fluid.
Now of course a debacle of the Penn Square variety requires at least one other thing, which is a banking industry so fixated on this quarter’s profits that it can lose track of the minor little fact that lending money to people who can’t pay it back isn’t a business strategy with a long shelf life. I hope none of my readers are under the illusion that this is lacking just now. With interest rates stuck around zero and people and institutions that live off their investments frantically hunting for what used to count as a normal rate of return, the same culture of short-term thinking and financial idiocy that ran the global economy into the ground in the 2008 real estate crash remains firmly in place, glued there by the refusal of the Obama administration and its equivalents elsewhere to prosecute even the most egregious cases of fraud and malfeasance.
Now that the downturn in oil prices is under way, and panic selling of energy-related junk bonds and lower grades of unconventional crude oil has begun in earnest, it seems likely that we’ll learn just how profitable the fracking fad of the last few years actually was. My working guess, which is admittedly an outsider’s view based on limited data and historical parallels, is that it was a money-losing operation from the beginning, and looked prosperous—as the Oklahoma boom did—only because it attracted a flood of investment money from people and institutions who were swept up in the craze. If I’m right, the spike in domestic US oil production due to fracking was never more than an artifact of fiscal irresponsibility in the first place, and could not have been sustained no matter what. Still, we’ll see.
The more immediate question is just how much damage the turmoil now under way will do to a US and global economy that have never recovered from the body blow inflicted on them by the real estate bubble that burst in 2008. Much depends on exactly who sunk how much money into fracking-related investments, and just how catastrophically those investments come unraveled.  It’s possible that the result could be just a common or garden variety recession; it’s possible that it could be quite a bit more. When the tide goes out, as Warren Buffet has commented, you find out who’s been swimming naked, and just how far the resulting lack of coverage will extend is a question of no small importance.
At least three economic sectors outside the fossil fuel industry, as I see it, stand to suffer even if all we get is an ordinary downturn. The first, of course, is the financial sector. A vast amount of money was loaned to the fracking industry; another vast amount—I don’t propose to guess how it compares to the first one—was accounted for by issuing junk bonds, and there was also plenty of ingenious financial architecture of the sort common in the housing boom. Those are going to lose most or all of their value in the months and years ahead. No doubt the US government will bail out its pals in the really big banks again, but there’s likely to be a great deal of turmoil anyway, and midsized and smaller players may crash and burn in a big way. One way or another, it promises to be entertaining.
The second sector I expect to take a hit is the renewable energy sector.  In the 1980s, as prices of oil and natural gas plunged, they took most of the then-burgeoning solar and wind industries with them. There were major cultural shifts at the same time that helped feed the abandonment of renewable energy, but the sheer impact of cheap oil and natural gas needs to be taken into account. If, as seems likely, we can expect several years of lowerr energy prices, and several years of the kind of economic downdraft that makes access to credit for renewable-energy projects a real challenge, a great many firms in the green sector will struggle for survival, and some won’t make it.
Those renewable-energy firms that pull through will find a substantial demand for their services further down the road, once the recent talk about Saudi America finds its proper home in the museum of popular delusions next to perpetual motion machines and Piltdown Man, and the US has to face a future without the imaginary hundred-year reserve of fracked natural gas politicians were gabbling about not that long ago. Still, it’s going to take some nimble footwork to get there; my guess is that those firms that get ready to do without government subsidies and tax credits, and look for ways to sell low-cost homescale systems in an era of disintegrating energy infrastructure, will do much better than those that cling to the hope of government subsidies and big corporate contracts.
The third sector I expect to land hard this time around is the academic sector. Yes, I know, it’s not fashionable to talk of the nation’s colleges and universities as an economic sector, but let’s please be real; in today’s economy, the academic industry functions mostly as a sales office for predatory loans, which are pushed on unwary consumers using deceptive marketing practices. The vast majority of people who are attending US universities these days, after all, will not prosper as a result; in fact, they will never recover financially from the burden of their student loans, since the modest average increase in income that will come to those graduates who actually manage to find jobs will be dwarfed by the monthly debt service they’ll have to pay for decades after graduation.
One of the core reasons why the academic industry has become so vulnerable to a crash is that most colleges and universities rely on income from their investments to pay their operating expenses, and income from investments has taken a double hit in the last decade. First, the collapse of interest rates to near-zero (and in some cases, below-zero) levels has hammered returns across the spectrum of investment vehicles. As a result, colleges and universities have increasingly put their money into risky investments that promise what used to be ordinary returns, and this drove the second half of the equation; in the wake of the 2008 real estate crash, many colleges and universities suffered massive losses of endowment funds, and most of these losses have never been made good.
Did the nation’s colleges and universities stay clear of the fracking bubble?  That would have required, I think, far more prudence and independent thinking than the academic industry has shown of late. Those institutions that had the common sense to get out of fossil fuels for ecological reasons may end up reaping a surprising benefit; the rest, well, here again we’ll have to wait and see. My working guess, which is once again an outsider’s guess based on limited data and historical parallels, is that a great many institutions tried to bail themselves out from the impact of the real estate bust by doubling down on fracking. If that’s what happened, the looming crisis in American higher education—a crisis driven partly by the predatory loan practices mentioned earlier, partly by the jawdropping inflation in the price of a college education in recent decades, and partly by rampant overbuilding of academic programs—will be hitting shortly, and some very big names in the academic industry may not survive the impact.
As Yogi Berra liked to point out, it’s hard to make predictions, especially about the future. Still, it looks as though we may be in the opening stages of a really ugly fiscal crisis, and I’d encourage my readers to take that possibility seriously and act accordingly.
Categories: Peak oil news

The Market Ticker - Oh Bull (FOMC)

The Market Ticker - 18 December 2014 - 8:44am

Oh Good Lord....

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. The Committee expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate. The Committee continues to monitor inflation developments closely.

Yeah, right.

Transitory energy price factors eh?  We'll see on that one; yes, it may well be transitory but if it is the snapback is likely to be really ugly (although a second-half 2015 or later story.)

I find the Fed and Yellen's press conference amusing in the extreme.  Of course the usual pump squad is all over the release trying to further crank up the stock market -- which doesn't surprise me at all, with the SPX now up 40 handles (2%.)

The fun part of this is that (1) thus far it hasn't done a damn bit of good other than cranking the stock and bond markets and (2) there's no evidence that it will in the future.

So what you have here is basically wishful thinking, but heh, candy-crapping Unicorns are all the rage these days......

Go ahead and believe, if you wish..... the fact of the matter is that the market has been in trouble of late not because of The Fed but rather because of weakening global demand that no longer can be denied as it is showing up in energy consumption.

Folks, it's simple when you boil it all down in terms of actual economic activity and forward views of same, as I pointed out in Leverage:  Behind every unit of GDP is a unit of energy.

Categories: Economics

Even climate change experts and activists might be in denial

Energy Bulletin - 18 December 2014 - 7:50am

One could argue that those who are very close to the reality of climate change are particularly prone to a need to split their identity. The knowledge they have, and the images they have seen, might unconsciously lead them to the above-mentioned counter-balancing and coping behaviours.

Categories: Peak oil news

Got Tech Stocks? Sell These Flops Now…

The Daily Reckoning - 18 December 2014 - 7:45am

This post Got Tech Stocks? Sell These Flops Now… appeared first on Daily Reckoning.

Stocks started higher yesterday. And it looked like we were looking at a much-needed comeback day to steady this wobbly market…

But no. Just before the closing bell, sellers crashed the party and squashed what was left of the rally.

That ain’t exactly bullish, my friend. That Santa Claus rally might have to wait till next year.

That’s the bad news. The good news?

You’ve got a chance to put a nice 35% gain in your pocket - today.

I’ll tell you how in a second…

But right now, I’m staring some nasty breakdowns in the eye. And I’m not talking about some fly-by-night garbage stocks either. These are legit, household names that investors are kicking down the stairs.

I’m talking about tech stocks. No, not the social media names I’ve been hating on recently. I mean the big tech “blue chips” that rarely drop 1% on any given day—let alone 3%. But that’s exactly the kind of breakdowns we’re seeing this week.

Confidence in the stock market has evaporated just days after it hit all-time highs. The S&P 500 has dropped 5% in just seven trading days. And yesterday brought nothing but selling.

Of course, the unexpected crude crash has had a major hand in all this. Every analyst and economist on the planet has oil targets on the books that are flat-out wrong. At the start of the year, the consensus estimate for year-end oil prices was about $95. I don’t think I have to tell you how wrong this turned out to be…

And the latest victim of the crude rout is none other than the stalwart tech stocks. These are the go-to trades that have held up all year long. I’m talking about stocks like Google, Yahoo! and Microsoft. Like I said before, these aren’t no-name stocks you’re seeing drop more than 10% from their highs last month. These are the cream of the crop. Well, maybe I should say “were”…

Remember our old friend Amazon? The stock I called a big, fat sell back at the end of October? Well, it’s down nearly 13% this month alone…

Google’s another one. The king of search can’t even find a buyer these days. By the closing bell, it had dropped to new 2014 lows. As of this morning, this stock is down more than 11% on the year. That just plain sucks…

These big, safe tech stocks are easily outpacing the S&P and Nasdaq’s declines this month. Whether you’re trading or investing, you’ll want to avoid these names until they begin to show signs they’re ready to turn it around.

Which brings me to your second big sell of the week. That’s right, I have another sell for you today. Just the other day you booked gains close to 20% on your Freeport-McMoRan Inc. (NYSE:FCX) short play. This time, you’re able to net a cool 35% gain.

I’m talking about Apple Inc. (NASDAQ:AAPL).

You already know that Apple has been a great performer in our longer-term portfolio. I named this stock our “trade of the year” all the way back in January. That’s back when no one was expecting much from the tech giant.

But you know the rest of the story…

Apple delivered for us in a big way in 2014. Throughout bouts of volatility and uncertainty, Apple shares soldiered higher. However, December has not been kind to this stock. It’s down sharply from its November highs—a move that’s not just out of character, but possibly a sign that we’ll see further weakness from tech stocks large and small heading into the 2015.

Plus, Apple is now well below its 50-day moving average. And given that we’re approaching 2015, I think this is a sign that you should take profits on this play. While the S&P 500 is up less than 7% this year, AAPL has surged more than 35%. Take these gains off the table now.

Regards,

Greg Guenthner
for The Daily Reckoning

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Categories: Economics

Elizabeth Warren And The Independent Community Bankers of America Are Right: Antonio Weiss Should Not Become Undersecretary for Domestic Finance

The Baseline Scenario - 18 December 2014 - 7:22am

By Simon Johnson

Antonio Weiss has been nominated to become Undersecretary for Domestic Finance at the Treasury Department. A growing number of people and organizations have expressed reservations about this potential appointment, which requires Senate confirmation – including Senator Dick Durbin (D., IL), Senator Jeanne Shaheen (D.,NH), Senator Joe Manchin (D., WV), the American Federation of Teachers (in a press release on December 17th), and other groups. And, from another part of the political spectrum, the Independent Community Bankers of America has also come out strongly against Mr. Weiss.

In a speech last week, Senator Elizabeth Warren detailed her concerns about Mr. Weiss’s background:

“He [Mr. Weiss] has focused on international corporate mergers and companies buying and selling each other. It may be interesting, challenging work, but it does not sufficiently qualify him to oversee consumer protection and domestic regulatory functions at the Treasury that are a critical part of the job.”

And Senator Warren made it clear that the Weiss nomination needs to be seen in this broader context:

“Time after time in government, the Wall Street view prevails, and time after time, conflicting views are crowded out.”

A line must be drawn and, as Senator Warren said on Friday evening, with regard to the Wall Street view that what is good for executives at big banks is good for the country,

“Enough is enough.”

The latest round of pushback from Weiss supporters against Senator Warren makes three points. First, this administration is not captured by the Wall Street view. Second, Mr. Weiss is not captured by the Wall Street view. And, third, that Mr. Weiss is so perfectly qualified for the job that all these broader issues are irrelevant or even illegitimate. None of these points has a substantive basis or can withstand scrutiny. The ICBA, AFT, and Senators Durbin, Machin, Shaheen, and Warren are right to continue opposing Mr. Weiss’s appointment.

On the extent of capture of this administration by the Wall Street view, the facts are straightforward. The Obama administration has continually refused to put forward any potential nominee for a senior position who has shown serious backbone with regard to financial reform. There appears to be a litmus test. If you want to be tough on reform – in the sense of confronting Too Big To Fail head-on or even just reducing the reckless risks that big banks take with derivatives – you cannot have a senior administration job.

A few reformers have, of course, managed to get through. Gary Gensler took financial reform seriously and implemented the Dodd-Frank law as chair at the Commodity Futures Trading Commission. The administration seems to have been surprised by how tough he was – and they did not reappoint him. Janet Yellen became chair of the Federal Reserve Board, but only because the White House could not get sufficient support for Larry Summers. And Tom Hoenig and Jeremiah Norton are strong voices for sensible policy at the Federal Deposit Insurance Corporation – but they were both put in office by the Republicans.

There is no balance of views at the top of the US Treasury. The Wall Street view – what’s good for the people who run big banks is good for the country – is fully in control. The most recent demonstration of this point came just last week, when House Republicans proposed to repeal Section 716 of Dodd-Frank – a direct attempt to help Citigroup and other megabanks by allowing them to run more dangerous derivatives out of their insured banks (and therefore create more downside risks for taxpayers and the broader economy). Treasury and the administration not only did not oppose this measure – they actively undermined House Democrats and Senator Warren in their attempts to stick up for Section 716. There is no backbone on financial reform at Treasury.

Regarding Mr. Weiss himself, the reasonable question is: to what extent does he believe in any version of the Wall Street view?

We know many things about Mr. Weiss but we don’t know everything. Therefore any reasonable observer faces a signal extraction problem – there is plenty of noise and distraction, but what are his real views? Here is what we have to work with:

  • Weiss has no known competence on anything to do with financial regulation. There is no track record.
  • Weiss has never communicated, in public or private, on financial reform issues with anyone who has worked hard against the Wall Street view over the past six years (or ever).
  • Weiss’s employment has involved advising on international mergers and acquisitions for 20 years. Lazard, his firm, does deals involving big banks – and it hires plenty of people who previously worked at global megabanks such as Citigroup.
  • Many people who live and work in this kind of milieu share some version of the Wall Street view. For example, some of the most vociferous defenders of Citigroup are people in smaller financial firms and in law firms (and in think tanks) who make their living from the Citi ecosystem (and the implicit government subsidies that keep this bizarre and dangerous structure going).
  • Not everyone who has worked in finance believes in the Wall Street view (e.g., Gary Gensler). But at this point – six years after the crisis – most of the serious skeptics regarding the supposed advantages of megabanks have made their voices heard, at least in private.
  • Weiss is associated with Robert Rubin, for example through a paper (on fiscal issues) they both signed that was produced by the Center for American Progress. Mr. Rubin has, while in office during the 1990s, while at Citigroup during the 2000s, and still today, consistently exhibited a strong version of the Wall Street view.
  • Rubin has exerted great apparent influence on this administration, including by directly or indirectly encouraging the White House to hire people with minimal public track records on financial reform – who then prove to be profoundly disappointing by siding repeatedly with the big Wall Street players.
  • More broadly, the attitude of the Obama administration on financial reform has been profoundly disappointing – including, now, not even going to bat for their own legislation.
  • Everyone on the Board of Governors of the Federal Reserve System has at this point been appointed or re-appointed by the Obama administration. The only person on that Board who definitely does not share the Wall Street view is Janet Yellen.
  • The administration has steadfastly refused to take seriously any potential appointees to the Fed Board of Governors who would be tough on the Wall Street view. There have long been two vacancies on the Board – and the administration will not advance a single person who worries about the profound risks created by big banks or any kind of proven willingness to implement the Dodd-Frank reforms.

In recent days, Mr. Weiss’s supporters have sought to rally support through two outside letters that stress Mr. Weiss’s supposed qualifications for the job. But both these letters further weaken the case for Mr. Weiss – seen in terms of the signal extraction problem, these interventions strengthen the likelihood that Mr. Weiss shares a disturbing version of the Wall Street view.

One letter, dated December 11, is from four former Undersecretaries for Domestic Finance. The authors concede that Mr. Weiss has no experience in managing the national debt so, by their own definition, the issue is whether Mr. Weiss is suited to a key position relative to financial regulation. Their argument comes down to this:

“Mr. Weiss has spent a quarter century operating in financial markets, including more than 20 years at Lazard, the last five of which as Global Head of Investment Banking. He has specific expertise advising companies how to grow, and how to finance that growth. Lazard is not a money center or lending bank and does not engage in sales and trading. Mr. Weiss has been deeply involved on behalf of large and small client companies in negotiating every type of financing, from debt and equity through more complex structures.”

All this says is: he worked on Wall Street, knows about corporate finance, and did not directly get bailed out in 2008-09. But there is no definite or specific information here that helps us understand or verify whether Mr. Weiss at all shares, or even deeply believes in, the Wall Street view – an important part of which now is “bailouts are fine” and “the government made money”; completely ignoring the costs of the financial crisis to the broader economy and to ordinary Americans.

The fact that Mr. Weiss’s strong supporters would send a letter devoid of relevant information on this point should itself be interpreted as a signal. If Mr. Weiss were at all skeptical of megabanks, now would be a good time to communicate that point – and we see nothing of the kind.

The second letter, dated December 12, is from the Partnership for New York City, which is an organization comprised primarily of leading New York-based companies – naturally heavily weighted towards finance. The membership of the Partnership includes all the Too Big To Fail banks, although most of them chose not to sign this letter (with the exception of Morgan Stanley).

Instead, the prominent names among those signing include top Wall Street lawyers, people at financial firms that do a lot of business with TBTF banks as partners or counterparties, and former executives from the largest global megabanks (including the former chairman of Citigroup). Many of these individuals have no material interest in seeing an end to the distortive government subsidies associated with any financial firm perceived as being Too Big To Fail. Indeed, the net worth, status, and professional opportunities for many on the Partnership’s letter are presumably closely tied to the fortunes of TBTF banks. These are smart, rational people with a good grip on how the world works – it does not seem unreasonable to think many of them wish to continue receiving, indirectly, the benefits of implicit taxpayer support provided to the likes of Citigroup.

Similar views to those of high-profile individuals in the Partnership for New York are not underrepresented in this administration and in this Treasury Department. Many of these people have access also to the very top of the White House.

And, as matter of routine, an influential subset of this group also appoints, oversees, and can actually remove from office one of our most important financial regulators, the president of the Federal Reserve Bank of New York. A major part of our modern difficulties can be traced back to the fact that the New York Fed has become completely captured by the Wall Street view. (Senator Jack Reed has a legislative proposal that would help deal with this problem by reducing the powers of the Board of the New York Fed, where the banking sector still holds the reins.)

It is hard to see the letter from the Partnership for New York as anything other than confirmation of the points made by opponents of Mr. Weiss. Camden R. Fine, president of the ICBA, put it this way:

“While Mr. Weiss has impressive credentials as a top Wall Street executive specializing in international mergers and acquisitions, Wall Street is already well represented at Treasury, and the narrow focus of Mr. Weiss’s professional experience is a serious concern for ICBA and community banks nationwide.”

Senator Warren agrees completely, with slightly different wording:

“It’s all about the revolving door – that well-oiled mechanism that sends Wall Street executives to make policies in the government and that sends government policymakers straight to Wall Street. Weiss defenders are all in, loudly defending the revolving door and telling America how lucky we are that Wall Street is willing to run the economy and the government.”

As argued by his opponents and as confirmed by the public statements of his strongest supporters, Antonio Weiss does not have the right background, qualifications, or – as far as anyone can reasonably determine – views to become Undersecretary for Domestic Finance.

Categories: Economics
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