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The Market Ticker - I Told You So (Again) - LFTRs

The Market Ticker - 2 hours 29 min ago

In Leverage (see at right) along with a series of articles here over the years I've made what I believe is a decent case for LFTR technology -- nuclear fission using thorium as the fertile fuel dissolved in molten salt.

Why?  Several reasons, chief among them:

  • The fuel is (relatively) plentiful, about as common as lead in the environment.  It is also specifically found in coal, which happens to be very convenient for one means of exploiting this technology.

  • Carbon (in any form) can be turned into liquid hydrocarbons (gasoline and diesel, to name two.)  The Germans figured this out in WWII and it is currently used in production in South Africa, among a few other places.  In other words, we know how to do that.

  • The LFTR runs at ~600-650C, which conveniently is a temperature that works well for direct use in the Fischer-Tropsch reaction to convert said carbon to liquid fuels.

  • We have ~400 years, more or less, of coal at reasonably-conservative energy use growth rates (e.g. approximately equal to our expected population growth), so we have both the Thorium and coal to do this.

  • Finally, there is a monstrous surplus of energy produced from the thorium found naturally in coal (~13x) compared to just burning the coal.

These points means we can replace the electricity we generate today by burning coal, use the coal to make synfuel and thus completely replace all foreign sources of oil for the next 400 years.  The back-of-the-envelope math says we can do this using approximately the same amount of coal we use today -- but in a fashion that processes it first so as to remove the sulfur and other nasty compounds from what goes into the air.  This will also cut CO2 emissions markedly because while the land and air fuel will remain liquid (and for other thermodynamic reasons I believe they will in the main for a long time to come, the fad-car pontifications notwithstanding) the use of oil for that fuel will go to an effective zero while the coal consumption will not increase.  While I personally do not believe in the global scaremongering climate nonsense if you happen to this makes a further reason to support such a path.

The laws of thermodynamics are not suggestions folks; they are laws.  Any solution we wish to put forward to our energy challenges must comport with those laws, and most of the ones that the greenies want to embrace simply do not.  If you want to live in a cave then most of those "other ways" are fine, but few of us are happy to live in a cave.

China has decided to not live in a cave.

One final point:

Energy is the key to GDP and both economic and personal prosperity; we had damn well better get off our asses or we're going to get run over from the East.

Categories: Economics

Start Sharing: Interview with 'Legal Rebel' Janelle Orsi

Energy Bulletin - 5 hours 31 min ago

In this episode of The Good Stuff, Annie sits down with sharing champion and legal rebel Janelle Orsi.

Categories: Peak oil news

Sophy Banks on Creating a Culture of Celebration

Transition Culture - 9 hours 10 min ago

When I was about 12 a friend of my sister came on holiday with my family. We were quite a typical family of three irritable siblings – when someone started singing or playing an instrument another child was guaranteed to tell them to “Shut up, that sounds horrible”.  We were continually fighting over whatever shifting thing was deemed to be the desirable whatever – sitting in the middle, sitting by the window, going first, going last. My sister’s friend who joined us was an only child and I was stunned to find that she only ever said nice things – to everyone.

When one of us started singing she’d say “hey that’s nice”, pick up a guitar and play along. Anything creative, funny, she’d be interested in and complementary about. Somehow in just a week we all got a taste for how peaceful and lovely it was when someone was nice to you, and the habit stuck. We all turned into nice teenagers, who had our fights, but generally were kind and supportive to each other.

I’ve been fascinated by group cultures – from time spent in women’s groups and football teams to psychotherapy groups and workplaces. Most recently within Transition Network, we’ve been paying attention to our culture of celebration and appreciation, and experimenting with ways of warming up our meetings.

My favourite statistic at the moment is that healthy, happy, resilient workplaces, teams, friendships and relationships have a ratio of at least 3:1 positive to negative statements. For every criticism, put-down, negative remark, there are at least 3 positive complements, appreciations, supportive statements. Five to one is a better ratio. Happy couples in normal conversations have a ratio around 20:1 – the conversation is a steady stream of interest, positive response, support and appreciation. Having more positives means not only more happiness generally, but also that when negatives come along people can hear and respond to them more, because they’re not defending against what feels like a bombardment of complaint.

Why do we need such a high ratio? Brain scientists have found that our brains are wired to be like Velcro to criticism – it goes in really quickly, and sticks – but like Teflon to praise – it slips past and is slow to go in.

If you imagine that belonging to your social group was the absolute determinant of survival for early humans, over millennia of evolution, responding and learning quickly in order to avoid negative or shaming social signals was absolutely vital. It makes me imagine that we also evolved to give each other a lot of positive reinforcement – so receiving affirmation for what we’re doing feels like a normal state to be in.

I personally believe that when we don’t have this ongoing positive feedback we feel a sense of lack – and if we’re really short of affirmation it can create the kind of inner emptiness that our consumer society just loves us to feel so we will attempt to fill up that craving with food or shopping or some other marketable product or experience.

So creating a culture of appreciation is a radical, political and profound choice. Seeing and appreciating what each member of a team is contributing is like a kind of sweet honey that people will keep coming back for. If you have meetings which are all about actions, doing, agenda, what we could improve, and have a low positive statement ration people are likely to leave feeling unconnected and exhausted. Meetings with lots of shared appreciation, as well as celebrating what has been achieved together, usually mean people leave feeling more energised than when they started.

How to create a culture of appreciation and celebration?

If you think this is something that would be good for your group you could put it down as an agenda item and have a group discussion. See if your group will agree to try out some of the ideas below – or come up with your own suggestions for how to keep up the ratio of celebrations and appreciations.

Know that shifting the group culture is likely to feel uncomfortable. Some people may really find this difficult – often those who have a strong inner critic and are used to a constant stream of inner criticism (and sometimes outer as well). This kind of criticism may be masking fear or a need to stay in control. Some may feel that it’s “unprofessional” to be something other than critical – I believe especially here in the UKbeing critical can gain you a lot of status. Know that the research shows it’s destructive and unhealthy – of all kinds of relationships – in the long term. 

Some things we’ve done within Transition Network meetings:

  • Start a meeting with a round of appreciations (we do this often at morning meetings at our big conferences – where everyone has been working flat out and there’s lots to get through. It takes a few minutes, and gives everyone a boost as they see the hardworking contribution recognised). They might be general or specific to one person.
  • Start a meeting with a go-round of “something you’re grateful for, or enjoying about life at the moment” – which puts us in a mood to notice positive things as we start.
  • Appoint a “keeper of the heart” in any kind of meeting to keep an eye on the feeling state of the group (we’ve adopted this after seeing it working at a National Hubs meeting). Part of their job is to notice opportunities to celebrate from the very simple “we’ve made a decision” to the more significant “we ran a wonderful event and had great publicity and 30 new names on the mailing list”.
  • End your meetings with a reflection on how the meeting went, starting with what you enjoyed about the meeting, and adding anything to improve for next time. It only need take 5 -10 minutes.
  • If the meeting energy is flagging have an “appreciations go round”, or even an “appreciations mingle”


Categories: TT news

Creating her own 'Little House' in Alaska - Homer Tribune

Transition Towns in the media - 23 July 2014 - 11:46am

Homer Tribune

Creating her own 'Little House' in Alaska
Homer Tribune
She is also involved in the Homer Garden Club, Homer's High-Tunnel Group and Transition Town Movement. “This is a movement whose mission is to imagine and begin to re-skill a society that is not dependent on fossil fuels,” she said. McAllister also ...

Categories: TT news

Creditism and the Threat of a New Depression

The Daily Reckoning - 23 July 2014 - 8:59am

Once we broke the link between dollars and gold, all the constraints on how much credit could be created were removed.

Total credit first went through one trillion dollars in 1964 in the United States, and over the next 43 years, it expanded from one trillion to fifty trillion. So we had a fifty-fold expansion in credit in the United States in 43 years, and this explosion of credit, created our world. It made us all much more prosperous than we would have been otherwise.

The ratio of debt to GDP went from 150%, all the way up to 370%. So it’s easy to understand how rapid credit growth drives economic growth.

But the day always comes, as the Austrians remind us, when credit can’t expand any further, and as Mises put it, that’s when the Depression begins, and that’s what started to occur in 2008.

We would have had a New Depression had the government not intervened, and the government sector then started borrowing and spending trillions of dollars every year, and that kept the total credit expanding still.

So now we have a total credit base of 59 trillion dollars. As I mentioned earlier, looking back to between 1950 and 2008, every time total credit adjusted for inflation, grew by less than two percent, we had a recession, and the recession didn’t end until we had another very big surge of credit expansion.

But since 2008, credit hasn’t been expanding by two percent, and that’s why the economy’s been weak, and that’s why the Fed has felt it necessary to intervene by creating trillions of paper dollars and pumping that into the financial markets to cause the stock market to go up and the property prices to reflate.

But at this point, the question is will credit ever begin to grow again enough to drive the economy? We now have such a large base, 59 trillion dollars. If we assume that the inflation rate is two percent, then we need total credit to grow by four percent so that total credit, adjusted for inflation, will hit this “two percent recession threshold”.

So four percent of 59 trillion dollars is 2.4 trillion dollars of credit growth that we need this year just to stay out of recession.

If you look at all the big sectors of the economy, there are just a few of them. You can see that none of them are going to expand their debt enough to make total credit grow by two percent.

So, essentially, this economic system we have, (I like to sometimes call it “creditism”) needs credit growth to survive, and without the credit growth, it’s going to collapse just as the Austrian economist taught.

The thing is if it collapses into a New Depression, this is not going to be something that involves some pain for a year or two and then takes us back to some sort of laissez-faire Garden of Eden. This is going to be after a five-decade sixtyfold expansion of credit we, that our government has managed to grow decade after decade after decade one way or the other.

If this collapses now, we’re going to have an equally protracted crash, and it’s not going to be a matter of taking a pain for a couple of years. The consequences of it would, I think, be a replay of the 1930′s and the 1940′s, but this time with nuclear weapons involved.

Would there be a recovery? Well, when Rome fell, there was a recovery, but it took a thousand years. So I don’t believe anyone alive today would still live long enough to see the recovery that would follow a New Depression.

Categories: Economics

Solar, peak oil and net energy - ABC Online

Peak Oil - Google - 23 July 2014 - 8:03am

Solar, peak oil and net energy
ABC Online
Importantly, it takes energy and capital to drill oil wells, build power stations and erect wind turbines. The ratio of the useful energy produced relative to the energy invested to get that energy is known as the energy-return-on-investment, EROI, or ...

The Market Ticker - Debt In A Limited And Prudent Way Is OK: Liesman

The Market Ticker - 23 July 2014 - 7:28am

So what is "limited" and "prudent" about the growth in debt over the last 30 years -- which is what Liesman seems to think has occurred and is occurring.  I'd love an explanation -- with references to this chart, of course.

Just sayin'.....

Categories: Economics

Advance Notice of the Next Market Crash

The Daily Reckoning - 23 July 2014 - 6:00am

Fifty years after the 1929 crash, a group of money managers and investment thinkers put together a collection of essays looking back at that experience. The result was a distillation of some pretty fine investment wisdom. Timely, I think, to review now.

One of the contributors was Arthur Zeikel, then with Merrill Lynch. The title of his essay summed up the motif of the whole collection: “After 50 Years, Nothing New Nor Likely.” This might seem deflating. It shouldn’t be, because it means there is a discernible pattern to events. A pattern we might make use of. On the ’29 crash, Zeikel wrote:

Stock price changes and investor behavior before and after the Crash represent no discontinuity with the general pattern of how markets have always worked.

In other words, people should’ve seen it coming. Zeikel doesn’t exactly say this. Certainly, no one could’ve predicted the ’29 crash with any confidence as to timing. But “conditions favoring such a turn were abundantly evident to those willing to look for them.”

Time solves so much if you can simply buy and hold.

Zeikel writes with the confidence of a man looking back at what has already happened. People in 1929 might have a beef with his view. Even so, rereading this collection of essays, the question arises: Are we now in one of those times that future investors will look back on and say, “They should’ve seen it coming”?

I have a hunch the answer is yes.

Zeikel gives no hard-and-fast rules as to how detect the ground giving way beneath our feet before it happens. Economic forecasts are not helpful, he says. This is a point that I yap about often.

But it bears repeating, since investors still focus too much on divining the economic winds. Let’s just say it didn’t help anybody in 1929.

Instead, Zeikel writes about how the market moves on expectations rooted in recent experience. Trends become self-affirming, and we grow blind to what runs counter to the status quo:

[Investors] fail to appreciate the workings of countervailing forces; change and momentum remain largely misunderstood concepts. Most investors have a natural inclination to cling to the course to which they are currently committed.

For this reason, investors are slow to see the ends and beginnings of new trends. Zeikel’s advice here is good: When a trend becomes widely accepted, it should be questioned all the more.

Even if you get it wrong, though, there can be a simple out: patience.

Peter L. Bernstein’s essay makes the point in a striking way. He says suppose you bought the Dow Jones industrial average in 1924. And say you held through thick and thin through 1936. Well, your annual return would’ve been 7.6%, before taxes. This strikes me as surprisingly good for a period that includes the Great Depression.

“Even if we pick a less ebullient year than 1936,” Bernstein continues, “and figure it out to 1939 instead, the total return still works out to about 6% in nominal terms. These are hardly returns to sniff at, particularly when adjusted for the deflation that accompanies them.” The cost of living fell 2% per year in the 1930s.

In addition to showing the power of sticking it out, this example also makes the point that stock market returns fit less neatly into the economic narrative than most of us would suppose. Great swings in the stock market can occur seemingly independent of the economy. More reason not to put too much focus on the economy.

The market itself ought to be the focus. And the market works perversely. When expectations are high, future returns are low; when expectations are low, future returns are high. It’s why Zeikel wrote that the “tenacity to go against the crowd [is] probably the single most important attribute for long-term investment success.” Fine words, but again kind of nebulous.

The simplest answer to these conundrums always seems to come back to basic old-fashioned long-term investing. Time solves so much if you can simply buy and hold.

My favorite essay of the lot comes from Robert Kirby, a longtime money manager and creator of the “coffee can portfolio” idea (which I’ve written about often in these pages). The coffee can portfolio is the ultimate buy-and-hold portfolio. You put a bushel of well-chosen stocks in a coffee can and forget about them for 10 years. Open after 10 years and, the theory goes, pleasant surprises await you.

I’ve never read anything by Kirby that didn’t strike me as wise. (Someone ought to republish his papers in a book.) And he doesn’t disappoint here. Kirby is the antithesis of the trader, of those who would try to chase what’s hot and what’s moving. He writes:

I believe an article by Benjamin Graham that I read many years ago carried the opinion that the development of liquid, high-volume auction markets for shares of publicly held American companies has been about the worst thing that has ever happened to the investment business. I have a great deal of sympathy with his observation.

When you know you can sell something almost instantaneously, it messes with how you think about the purchase in the first place. You can be careless, because you can get out quickly. If you knew that every time you bought a stock that you would have to hold it for a year, let’s say, then you would buy with much more diligence.

That’s a simple idea. And Kirby’s advice is a logical extension of it:

I have said often to almost anyone who would listen that… a portfolio of securities [should] be run like a real estate portfolio… The typical real estate commitment is made in anticipation of a projected cash flow versus expenses, i.e., the future internal rate of return… the investor does not assume that he will be able to sell the property at a higher price to someone else later on. Common stock portfolios should be constructed, and their future returns measured, by the same set of criteria.

It is almost impossibly hard to live by this rule. With constant measurement of returns and the oppressive 24-7 media cycle, the pressure to act is immense. When your mindless neighbor doubles his money in Tesla in two months, the idea of an internal rate of return seems irrelevant and even pointless.

But then again, these are exactly the kinds of defeatist sentiments that bubble up in years like 1929 — and in all times of euphoric markets, such as our own. Ironically, it is just then when such unfashionable ideas are most important. That’s really the point I would leave you with. Now is when you should apply the wisdom of Kirby, et al. — not after the market has already fallen.


Chris Mayer
for The Daily Reckoning

Ed. Note: Regardless of what the market does, there will always be safe, reliable ways to grow your wealth over the long term. You just need to know where to look and how to avoid those big bubble events the mainstream media can’t ever seem to predict. That’s why, in today’s Daily Reckoning email edition, readers were treated to a list of 10 Things to Look For When Trying to Spot a Bubble, and how that could help them protect their portfolios for years to come. If you’re not currently getting the Daily Reckoning email edition, you’re missing out on 50% of what we publish. And every issue contains a wealth of useful information like this. Don’t miss another issue. Sign up for FREE, right here to get started.

Categories: Economics

Transition Town collaborative planning event for a sustainable Valley - Comox Valley Echo

Transition Towns in the media - 23 July 2014 - 5:51am

Transition Town collaborative planning event for a sustainable Valley
Comox Valley Echo
There's amazing work occurring in the Valley that fulfills environmental, social and economic objectives. On Saturday July 26, Transition Town Comox valley is sponsoring an event to focus on connecting existing work to other existing work where ...

and more »
Categories: TT news

A New Bank that Challenges the US Dollar’s Reserve Status

The Daily Reckoning - 23 July 2014 - 5:27am

In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.

The U.S. was already the world’s commercial powerhouse, having eclipsed the British Empire several decades earlier. America was also on course to be among the victors of “Europe’s conflict,” even though its economy was largely unscathed by war. As such, Bretton Woods was U.S.-dominated and produced a settlement largely on U.S. terms.

…if Beijing and Moscow…drop dollar energy pricing, America’s reserve currency status could unravel.

Seventy years ago this week, that fateful summit ended. Its close marked the moment the dollar’s unquestionable supremacy was secured. Since then, global commerce has been conducted largely in dollars and leading economies have held the greenback as their primary reserve currency.

The same system remains intact today, with the lion’s share of commercial settlements worldwide still clearing the U.S. banking system — even if the parties involved have nothing to do with the States.

The dollar’s hegemony continues to be cemented, meanwhile, by the operations of the International Monetary Fund and World Bank. Founded at Bretton Woods, they’re both Washington based, of course, and controlled by America, despite some Francophone window-dressing.

The advantages this system bestows on the U.S. are enormous. “Reserve currency status” generates huge demand for dollars from governments and companies around the world, as they’re needed for reserves and trade. This has allowed successive American administrations to spend far more, year-in year-out, than is raised in tax and export revenue.

By the early Seventies, U.S. economic dominance was so assured that even after President Nixon reneged on the dollar’s previously unshakeable convertibility into gold, amounting to a massive default, dollar demand kept growing.

So America doesn’t worry about balance of payments crises, as it can pay for imports in dollars the Federal Reserve can just print. And Washington keeps spending willy-nilly, as the world buys ever more Treasuries on the strength of regulatory imperative and the vast liquidity and size of the market for U.S. sovereign debt.

It is this “exorbitant privilege” — as French statesman Valéry Giscard d’Estaing once sourly observed — that has been the bedrock of America’s post-war hegemony. It is the status of the dollar, above all, that’s allowed Washington to get its way, putting the financial squeeze on recalcitrant countries via the IMF while funding foreign wars. To understand politics and power it pays to follow the money. And for the past 70 years, the dollar has ruled the roost.

This won’t change anytime soon. Something just took place, though, which illustrates that dollar reserve currency status won’t last forever and could be seriously diluted. Last week, seven decades on from Bretton Woods, the governments of Brazil, Russia, India and China led a conference in the Brazilian city of Fortaleza to mark the establishment of a new development bank that, whatever diplomatic niceties are put on it, is intent on competing with the IMF and World Bank.

It’s long been obvious the BRICs are coming. The total annual output of these four economies has spiraled in recent years, to an astonishing $29.6 trillion (£17.3 trillion) last year on a PPP-basis adjusted for living costs. That’s within spitting distance of the $34.2 trillion generated by the U.S. and European Union combined.

America’s GDP, incidentally, was $16.8 trillion on World Bank numbers, and China’s was $16.2 trillion — within a whisker of knocking the U.S. off its perch. The balance of global economic power is on a knife-edge. Tomorrow is almost today.

Consider also that the BRICs collectively hold sway over 50% of global currency reserves, rising to almost three-quarters if you take the emerging markets as a whole. The G7 nations between them control only 20% — and less than 8% if you exclude Japan.

Based on such balance sheets, we’re now seeing institutional change. The new BRICs Development Bank, modelled on the IMF, will have a $100bn currency reserve available to lend around the world, giving distressed debtor nations an alternative to the “Washington consensus.”

For a long time, the BRICs have been paying in to the IMF, yet been denied additional influence over what happens to the money. Belgium has more votes than Brazil, Canada more than China.

The institutions governing the global economy have failed to keep pace with reality. Modest reforms giving the large emerging markets more power, agreed with much fanfare in 2007 and again in 2010, have been stalled by Washington lawmakers. The BRICs have now called time, setting up their own, rival institution based in Shanghai.

Although the dollar’s reserve status won’t end overnight, the global payments system is now moving inexorably towards that outcome.

The key to the dollar’s future is petrocurrency status — whether it’s used for trading oil and other leading commodities. Here, too, change is afoot. China’s voracious energy appetite and America’s increased focus on domestic production mean the days of dollar-priced energy look numbered.

Beijing has struck numerous agreements with Brazil and India that bypass the dollar. China and Russia have also set up rouble-yuan swaps pushing America’s currency out of the picture. But if Beijing and Moscow — the world’s largest energy importer and producer respectively — drop dollar energy pricing, America’s reserve currency status could unravel.

That would undermine the U.S. Treasury market and seriously complicate Washington’s ability to finance its vast and still fast-growing $17.5 trillion of dollar-denominated debt.

In May, Beijing and Moscow signed a huge multi-decade gas supply contract, to sit alongside a similar oil deal agreed in 2009. No one knows what share of this energy trade will be on a yuan-rouble basis — and the two governments aren’t saying. This question, seemingly inane, is among the most important diplomatic issues of our time.

At the moment, although Russia’s export partners do sometimes settle in roubles, most Sino-Russian trade is still in dollars. But the combination of this new gas deal, and western sanctions on Russia — has seen Moscow and Beijing step up bilateral efforts to facilitate large-scale non-dollar settlement.

With western anti-Russia sanctions likely to be tightened again after the tragic shooting of a Malaysian passenger plane over Ukrainian airspace, Beijing’s response will be closely scrutinized. I, for one, expect the Chinese to say little until it’s clearly established who grounded the plane and why.

Although the dollar’s reserve status won’t end overnight, the global payments system is now moving inexorably towards that outcome. The U.S. currency accounted for just 33% of all foreign exchange holdings in 2013, on IMF numbers, down from 55% in 2001.

Within a decade or so, a “reserve currency basket” may emerge, with central banks storing wealth in a mix of dollars, yuan, rupee, reals and roubles, as well as precious metals. Perhaps some kind of synthetic bundle of the world’s leading currencies will be developed, with emphasis placed, after years of western money-printing, on assets backed by commodities and other tangibles.

I also believe central banks may include cybercurrencies (such as bitcoin) in their reserves. If you think that’s mad, consider that mankind has long sought scarcity — be it with shells, stones or metallic elements — to store wealth. Now the money-printing taboo has been broken by yet another generation, it makes sense to use complex computer algorithms to ensure that only a certain amount of a particular currency unit can ever exist.

The dollar’s status is a big question. Judging the outcome is more akin to stargazing than scientific economics. But the establishment of this BRIC Development bank, timed to coincide with the anniversary of Bretton Woods, is an audacious and significant move. The world’s emerging giants now have thumbscrews on the West.


Liam Halligan
for The Daily Reckoning

Ed. Note: If the U.S. loses its world reserve currency status, what will you do? If you don’t immediately know the answer to that question, we suggest you sign up for the FREE Laissez Faire Today email edition. In every single issue, readers are given several opportunities to discover real, actionable investment advice that will aid them in any kind of market, no matter what happens to the US dollar’s reserve status. Click here now to sign up for FREE, and you could discover a slew of ways to protect and grow your wealth as you never thought possible.

This article originally appeared here.

This article was also prominently featured in Laissez Faire Today.

Categories: Economics

The Market Ticker - Why Ackman's Herbalife Ponzi Presentation is Failing

The Market Ticker - 23 July 2014 - 4:59am

How can you look at the graphics of what Herbalife has done and admitted in their own documentation, as Ackman has laid forth, and not come to the conclusion that this is a pyramid scheme and thus must collapse?

How can regulators not immediately shut this crap down?

It's rather simple, but Bill doesn't appear to get it: If that door opens the all of the existing "growth" claims and projections may be laid upon the table as equally fraudulent.

The reality is quite simple: All compound, that is, exponential, growth claims without a terminal date and point stated are by definition frauds.

They're frauds because as soon as your put forward the idea that an infinite compounded series of growth can exist you're lying.  You are promoting a mathematical impossibility.

I ask that you read once again my Ticker from 2011.

Note that when the "penetration" into a given market is just 12.5% you are ten such "growth periods" in.  That's a good long time, right, and yet it appears you have virtually unlimited growth ahead of you!

The fact is that you are also three such periods away from certain catastrophic collapse, and likely less, because collapse almost always comes before the finality of actual resource exhaustion occurs due to rapidly-increasing costs of accessing the remaining resources.

So why is Herbalife's stock up 13% as I write this, even though Ackman has (again) put forward hard evidence that their "growth" is nothing more than trying to find new ways to play with exponents and they even market it this way to their "partners"?

That's simple -- to admit this widely and publicly would be to collapse the markets.


Categories: Economics

Diverse Opportunities in the Boomer-Controlled Market

The Daily Reckoning - 23 July 2014 - 3:59am

You aren’t getting any younger…

It’s no secret. You’ve heard time and again how the aging baby boomers are warping this country’s demographics. Births are dropping, while the ranks of folks cashing Social Security checks grows by the day. Now, big business is set to take advantage of the trend.

Just how much older are we getting? Check out the statistics…

“Births peaked in the U.S. at 4.32 million in 2007 and declined for five years before leveling off recently. Some 3.96 million babies were born in the U.S. last year, according to preliminary data from the Centers for Diseases Control and Prevention,” The Wall Street Journal reports. “The number was up slightly from 2012, but the country’s fertility rate dropped to a record low of 62.9 births per 1,000 women of childbearing age. Meanwhile, over 3 million Americans are now turning 65 each year, according to the Pew Research Center.”

Those 3 million Americans turning 65 every year have caught the eye of companies like Procter & Gamble and Kimberly-Clark. Look no further than the diaper market for proof. While sales of baby diapers and training pants have weakened, sales of incontinence products continue to grow. That’s why P&G is jumping back in the adult diaper business after a ten-year absence.

Yes, the adult diaper market is surging. The statistics backing up this claim are staggering. Sales of incontinence products have tripled to $1.5 billion over the past 15 years. For mega-cap consumer staples firms like P&G, this means potential sales of more than $500 million in just a few years, one analyst told the WSJ.

The geezer trade is now in full effect. Investment candidates in the aging-boomer niche are diverse. You have biotechs, generic drug makers, senior care facilities, consumer staples companies like Kimberly-Clark and P&G that are even altering their advertising strategies to target older people.

It’s no coincidence that health care stocks and other groups related to this trend are spanking the averages. Health care is the third-best performing sector year-to-date. Back when biotech shares were melting down a few months ago, I told you healthcare stocks could be a safe “hideout” for your trading dollars. That hasn’t changed.

The Health Care Select Sector SPDR ETF (NYSE:XLV) has gained more than 11% year-to-date. And as I told you earlier this month, the Affordable Care Act and an aging population both remain big themes in the long-term.


Greg Guenthner
for The Daily Reckoning

P.S. Today, I revealed to my premium readers what could be the ultimate play on our aging population. And readers of the FREE Rude Awakening email edition had an exclusive opportunity to get in on it before almost anyone else. It’s just one small benefit of being a subscriber to the Rude Awakening. Don’t miss out on this or any of the other incredible opportunities that come with a FREE membership. Sign up for the Rude Awakening for FREE, right here, and see how you can trade this trend and others for huge gains…

Categories: Economics

The Market Ticker - Fox Picks Up The Apple Spyware Story

The Market Ticker - 23 July 2014 - 3:08am

Well well....

Zdziarksi is certain that these mechanisms, whatever their purpose, are no accident. He has seen them become more complex, and they seem to get as much maintenance and attention as iOS's advertised features. Even as Apple adds new security features, the company may be adding ways to circumvent them.

"I am not suggesting some grand conspiracy," Zdziarski clarified in a blog post after his HOPE X talk. "There are, however, some services running in iOS that shouldn't be there, that were intentionally added by Apple as part of the firmware and that bypass backup encryption while copying more of your personal data than ever should come off the phone for the average consumer."

"My hope is that Apple will correct the problem," he added in the blog posting. "Nothing less, nothing more. I want these services off my phone. They don't belong there."

It's not a "problem" when something is intentionally done.

It's a choice and a decision.

How does any person or corporation justify buying, using or allowing on their network a device where the manufacturer has placed on it software that can and does bypass the security, including encryption, that they claim "protects" your data.

Categories: Economics

The Market Ticker - Oh Oh.... Obamacare Subsidies

The Market Ticker - 23 July 2014 - 3:07am

Oh my....

WASHINGTON –  A powerful federal appeals court dealt a major blow to ObamaCare on Tuesday, ruling against the legality of some subsidies issued to people through the Affordable Care Act exchanges.

A three-judge panel ruled 2-1 on Tuesday that the IRS went too far in reinterpreting the language in ObamaCare to extend subsidies to those who buy insurance through the federally run exchanges, known as HealthCare.gov.

This ruling, if it stands up through appeals, will destroy Obamacare.

It makes subsidies unavailable in those states that did not set up their own separate exchanges -- which, incidentally, is what the law actually says.

There are only 14 states that run their own exchanges.

This ruling, if it stands, invalidates subsidies in all of the other states!

Yes, the government will appeal....

Categories: Economics

The Market Ticker - Note: 2008 Comes Again?

The Market Ticker - 23 July 2014 - 2:50am

In early 2008 I noted a fairly serious decrease in online "revenue per impression" in the advertising space.  This was not reflected in so-called "official" reports from various online ad firms, but I saw it quite-clearly across data I had available to me.

What followed, of course, was quite clear in the markets....

I am seeing the same pattern develop now.

How reliable is this signal in terms of future events?  There's no way to know, of course, since it has one previous test and as with last time the claimed "official" reports today are at odds with what I am seeing.  

But it was a large enough, and sudden enough, move to alarm me in 2008.

I'm noting the same pattern now.

Categories: Economics

Two Realities

Energy Bulletin - 23 July 2014 - 1:17am

Our contemporary world is host to two coexisting but fundamentally different—and, in at least one crucial respect, contradictory—realities. Political Reality and Physical Reality.

Categories: Peak oil news

Blockupy and beyond

Energy Bulletin - 23 July 2014 - 12:52am

The blockade of the European Central Bank in 2012 and 2013 started as a German initiative but has triggered an international movement responding to a Europe in crisis.

Categories: Peak oil news

Top 10 books for summer

Energy Bulletin - 22 July 2014 - 11:49pm

We’ve put together our list of top 10 new book releases, just in time for the summer holidays.

Categories: Peak oil news

Hard facts about fracking

Energy Bulletin - 22 July 2014 - 11:46pm

A new book evaluates whether natural gas is a 'transitional fuel' to a low-carbon future—or perhaps, more like a methadone addiction that's tearing apart rural communities.

Categories: Peak oil news

Keeping Oil Production From Falling

Energy Bulletin - 22 July 2014 - 11:34pm

Production flows from a given oil field naturally decline over time, but we keep trying harder and technology keeps improving. Which force is winning the race?

Categories: Peak oil news
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