Super-bubble

Just finished reading George Soros's 'The New Paradigm for Financial Markets' who supports the view that we have entered a paradigm shift. We are witnessing an explosion of a super-bubble which began after the second world war and now marks the end of an era. The UK government debt as a percentage of GDP is 65% and if the government has to acquire HBOS that will rise to 85%. The percentage for sustainable growth is 40% so we are now officially in an unsustainable stage. Collapse appears inevitable. As a nation we are close to debt levels that mirrored those of the 1960's -a period of social revolution and radical social and economic changes. A lot of control is going to central government- soon they may own and control the majority of the financial markets- a kind of socialist state. There may also be one or two monolithic private financial institutes left standing, making mockery of monopoly laws- which may then fight for dominance against the government.

If a super-bubble has exploded than the pattern for the future is already set. There will be a super financial crash, which means house prices and investment schemes will nose dive into the ground creating a financial crater. This could mean 40-50% drops in house prices. This will mean at the bottom of the dive, things will actually be undervalued- this is the point of recovery as those in a position to do so start snapping up bargains and give stimulus to the next paradigms growth.

It is quite possible that all hell is about to break loose over the next several days/weeks or months. Like all bubbles- it is always the people at the bottom of the money pyramid that are the worse affected. If this is a super-bubble than it is going to affect a super amount of people. Once the effects are felt in people's personal lives- an explosion of emotions could result in unpredictable consequences. A state of emergency might be overstating the case but with our national debt in the red alert category we have probably entered it already. Denial is a common human reaction to having to face the unthinkable. The unthinkable and the unsinkable have one thing in common- there is no such thing.

Breakdown

Extreme mood swings from panic to mania, fear, speculation and confusion- that is the state of the economic system at the moment. Massive swings in share and commodity prices. The system is being tranquilized by massive doses of liquidity being injected into it. The percentage of national debt in terms of GDP for the UK is outside the limits set by the Maastricht Treaty. The US are in negotiations regarding obscenely massive bail outs- a policy which is in direct opposition to the belief in free markets- a belief which has been pedalled in a religious fanatical fashion.

This is total market failure.

Free markets can't work without being heavily regulated it would appear. But we also know that markets can't work effectively if they are heavily regulated (the best example is the failure of communism). This is a trap. The pendulum has just swung from one side to the other- regulation doesn't work and neither does freedom.

Who knows what is going to happen next?

I suspect the answer to this problem will not lie solely in economics. The whole concept of trying to run societies based predominantely on economic models is probably flawed. There is after all more to life than money. Capitalism in many ways is similar to a religion which is based on many assumptions and beliefs. It is when people loose their faith and trust that they start looking for something else.

A FIRST FOR BEDDINGTON

For more photos click on this link :

http://peteralfreybirdingnotebook.blogspot.com/

VICTORY

The Liberal Democratic local government in Sutton have capitulated to local people power and scrapped the £35-a-bag waste recycling scheme (re; blog entry Wednesday, 23 July 2008) . In their statement they included "With the credit crunch and rising food and fuel prices putting so much pressure on family budgets, the £35 charge was obviously the wrong approach and my colleagues and I have therefore decided to recommend the council that we scrap it and go back to free collection"

Metamorphosis

So the world economy is in transition, but what is it changing in to.

Metamorphosis is a dramatic natural process- the allignment of parts, the breakdown of complex structures, the redistribution of building blocks and reassemblage in another shape and form.

So over the last several months, all the pieces of the world economy have moved into position and now the breakdown and redistribution is occurring. It is interesting how the economy behaves in the same way as any natural system which ofcourse it has to be because it is part of Lovelock's Gaia.

But this emerging new world order- what will it be.

CALM DOWN

The word Titanic springs back to mind

So the banks (the elite bankers) are scrambling together at the muster stations. If they can gather quietly than they should avert a panic and slowly make their ways to the life boats.

They have probably worked out that half of this fleet is sinking. It will mean financial ruin for many. There are only so many lifeboats or safe havens- government backed financial institutions or safe private banks (who are they?) The banks need to retain an illusion of calm. If too many people start moving suddenly towards safety, than a bottleneck will form, followed by a scramble. That's a run and things are so volatile at the moment, it could break out at any moment. That run will mark the sudden end of an era- the experiment of ultra-aggressive capitalism- the financial apparatus would have collapsed and in times of emergency the government will need to step in and introduce emergency measures. That could mean, a surge of state purchasing of people's private property, state imposition of restriction on liquidity flow (you cant touch or transfer your savings without permission), the take over of a large section of banking system back to central control and this backed up by enforcement of law and order in response to the inevitable social unrest that will follow.

A capitalist state with more than a hint of socialism (even police state the most un-nerved will shout) would have emerged over night. Was this a socialisty plot? How clever is Gordon? If this does occur- then best to hope it was a plot, than at least someone is in control.

However, if a run doesn't occur, we will probably get to the same point but through a longer more scenic route. It is more likely to be a gradual process- of punctuated decline and a slow transition to less aggressive, more social-minded/environmentally friendly capitalism. Bring it on.

MELT DOWN

Above: a modern day castle.

Oh Dear,

Nasty corporate giants are crumbling all around. A financial system based on short term gain. elitism and lack of value to society and the environment appears to be going through a cataclysmic transition.. These are in some cases 100-200 year old institutional giants, which have slowly corrupted and become unstable. More will follow and so will tsunamis and shock waves (not literal obviously). The gangster-like giant corporations Lehman Bros, Merrill Lynch, Freddie Mac, Fannie Mae, Bear Stearns, BNP Paribas and others are wiping each other out in the equivalent of a global mafia style turf war. Nobody trusts eachother and who will be popped next. Who will remain as the 'Don'- will power shift back into the hands of government or will a global financial tyrant emerge??? Will benevolent capitalist institutions (Big Friendly Giants) prevail and take control. If the power shifts back into the hands of governments, will their peoples demand responsible governing, the re-distribution of power and a closing of inequality or will the crisis shift from one tyrant to the next. Does ultimate power lie chiefly in corporations, individual organic networks or government. How will the cake be divided. This is war (biology)and in the true nature of modern human warfare- the arena is not the trenches and fields but through control of resources through financial control and ideology. As usual, while the warlords prepare to engage, the majority of people are oblivious (caught up in distractions of a personal nature which is permitted to divert attention from the real game). In ignorance and/or lack of choice they (we or me) are pawns and some are about to be taken. Ignorance is bliss...... until the train hits you.

It aint all doom and gloom

And the band plays on....

Raptor passage at the Farm

http://peteralfreybirdingnotebook.blogspot.com/

Mmmm......

More interesting developments on the world stage. The Bush administration have guaranteed £2.8 trillion to salvage the sinking mortgage giants Freddie Mac and Fannie Mae. Well it probably wont be long before the British government have to run to the rescue of similar British giants to add to it's increasing portfolio of state owned recent acquisitions.

So corporations are falling into the hands of government. Very clever. I do wonder whether Gordon Brown has planned all this, when he was referring to a steady state economy. He is after all a socialist. Probably not, it is probably the laws of nature that are causing this crisis.

It is a very dangerous thing to have moved all the resources up to the higher trophic levels of a system because it means the foundations which those levels rest on become unstable. How can an elite class, standing on the shoulders of the working and middle classes expect to be held up if they deprive their human under-pining. This crisis is based on lending money to people who can't pay it back- the sub-prime. They can't pay it back because they haven't got it. They haven't got it because somebody else has it all for themselves. The unequal distribution of resources, or if you like elevations (Greed) is the resistance of the laws of nature and things that resist the inevitable are transient and do not persist. Nature continually works like a carpenters plane- trying to level things out and distribute things over a wide area. Mountains are washed to the sea.... and those mountains whose foundations are weak- collapse cataclysmically forming very large craters.

Now.... what for the very large mountain of financial resources that has built up on the small island that I live on. It is all a question of time. At the moment a storm is raging- eroding the top and sides. For as long as the foundations are sound, there should be no land slide and things will move at a manageable pace. Yes it is all to do with those foundations- the ones we call sub-prime.

I know the perils of favouritism but out of my nine neices and nephews- this little fellow gets my vote. I am in the process of making him a coat of many colours:-)

The fairer of the species

It is interesting how sexual dimorphism in the class Aves generally results in the male as the more gaudy and extravagant of the sexes. There are famous reversals of this general rule such as the phalaropes and in many species there is no plumage sexual dimorphism, such as Tree Sparrow. Well, I was just thinking-who is the fairer of the human sexes- is it the male or the female? Generally sexual dimorphism represents some kind of different role play. A gaudy extravagant male in a bird species usually means the male spends so much time adorning himself and is so conspicuous to predators that he is of little use to her when it comes to raising her offspring. Sexual selection creates an arms race amongst the males to become the most ridiculous dresser uppers, singers and dancers. This is not helping me work it out????

Humans are strange- it is like they are all the animals rolled into one- we can fly, dive, burrow, walk, run, swim, eat vegetarian, eat meat, eat nearly anything, males and females sing, males and females dance, both hunt, both gather, both farm, humans can work in groups, work alone, they can have 100 partners or have one partner, two wives, ten husbands, no wives- there are few rules. It would be a nightmare trying to write a HBW style summary of human sub-species and distribution, descriptive notes, habitat, food and feeding, breeding, movements and status and conservation. It will be like -everything goes.