Author Archives: the editor

Fear, Panic, and Chaos

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We will start off easy….

The ruble slumped to its weakest level against the dollar in 11 years as investors speculated Russia will be forced to give up its currency defense after draining reserves.

One should note that Russia has not drained its reserves yet. The market is just beginning to anticipate that they will be drained. Then what?

Now it is time to panic…..

Every week it gets worse and worse and worse. Today it was Japan….

THERE HAS NEVER BEEN DATA THIS BAD FOR ANY MAJOR ECONOMY – EVEN IN THE GREAT DEPRESSION. December industrial production came in down 9.6%, worse than the METI forecast. It is now down almost 21% year over year. METI forecasts a further 4.7% decline in February. The inventory to production ratio soared again. Maybe METI will be correct.

If it is, Japan industrial production will have fallen 28% (non annualized) in four months. It will have fallen by a third in about a year. Nothing in the history of major nations compares. A 28% decline in four months would be more than half of the entire decline in U.S. industrial production over the 3 years and nine months of the U.S. Great Depression.

As far as the chaos goes, this will have to do….

Relativity minor so far, but this kind of thing is going to grow as economic problems get worse. It is going to test the EU’s ability to hold together.

As far as these particular strikes are concerned, they are going to get a lot worse in the week ahead. A story to watch.

12 inches of snow shut down a nation

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From the Telegraph….

Large swaths of Britain came to a standstill in the grip of the worst snowstorms for 18 years.

Despite five days of severe weather warnings, transport bosses still appeared to have been completely caught out as up to a foot of snow fell across the country, bringing rail, air and road networks to a halt.

From later on in the article…..

But David Frost, the director-general of the British Chambers of Commerce, said the collapse of the transport network was unacceptable.

He said: “People of my generation saw much worse winters than this in the 1960s and 1970s, yet things kept going. Why can’t we cope now?

You should keep this mind when ever someone tries to tell you that we should drive vehicles more like the ones they drive in Europe. A fuel efficient vehicle is one that is light. And a light vehicle is one that can’t get traction in the snow. It is a simple matter of physics.

Essay of the Week: 2/1/09-2/7/09

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Letters to Malcolm and the trouble with Narnia: C.S. Lewis, J.R.R. Tolkien, and their 1949 crisis by Eric Seddon is an exploration of why Tolkien objected so strongly to C.S Lewis’s Narnia series and why their friendship cooled so markedly.

It must be admitted that this essay suffers to a degree from the author’s strong Catholic bias. There is no denying that J.R Tolkien was a committed orthodox Catholic. But interpreting J.R Tolkien’s likes and dislikes and what bothered him solely through the prism of Catholic doctrine is to get a limited view of the man.

In particular, some of us would argue that Mr. Seddon gives too short a shrift to J.R. Tolkien’s strongly held aesthetic views (and in particular, his strong aversion to allegory). Mr. Seddon argues that because J.R Tolkien did not object to all of C.S Lewis books equally, then therefore his aesthetic principles could not have been a large part of what he found so offensive in the Narnia series. We do not find this particular argument convincing.

Using the same method of arguing as Mr. Seddon, we could easily argue that theological objections could not have been what bothered J.R. Tolkien because many of C.S. Lewis’s earlier works did not conform to Catholic doctrine.

Nonetheless, Mr. Seddon’s central argument that J.R Tolkien so strongly objected to the Lion, The Witch, and the Wardrobe because of way C.S. Lewis’s his type of Christ is not without merit. Only, we would add that The Lion, The Witch, and the Wardrobe was also the penultimate type of what Tolkien objected to aesthetically.

To be sure, the two types of objections were never particularly distinct in Tolkien’s mind. But to fail to understand how the two things intertwined is to not understand why Tolkien should object so strongly to Narnia and not as strongly to other books that transgressed various Catholic doctrines.

Is it going to blow?

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From the Telegraph….

Tens of thousands of people living near Japan’s volatile Mount Asama have been told to brace themselves for a major volcanic eruption within 48 hours.

From later in the article…..

According to scientists at an observation station operated by Tokyo University, there was a sharp increase in volcanic earthquakes in the region in January, with their epicentres directly below the peak of the mountain. That volcanic activity accelerated on Sunday morning and was accompanied by crustal change, apparently caused by increased magma movement beneath the peak.

Experts are predicting an eruption is possible in a matter of hours and an initial blast could hurl volcanic rocks up to 2.5 miles.

If this thing blows, next winter will probably be even colder thzn this one already is.

Tough Times Are Good For You

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From Tyler Cowen’s op-ed in the New York Times…

Recessions and depressions, of course, are not good for mental health. But it is less widely known that in the United States and other affluent countries, physical health seems to improve, on average, during a downturn. Sure, it’s stressful to miss a paycheck, but eliminating the stresses of a job may have some beneficial effects. Perhaps more important, people may take fewer car trips, thus lowering the risk of accidents, and spend less on alcohol and tobacco. They also have more time for exercise and sleep, and tend to choose home cooking over fast food.

In a 2003 paper, “Healthy Living in Hard Times,” Christopher J. Ruhm, an economist at the University of North Carolina at Greensboro, found that the death rate falls as unemployment rises. In the United States, he found, a 1 percent increase in the unemployment rate, on average, decreases the death rate by 0.5 percent.

Odds and Ends

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From the New York Post…

Buried deep inside the massive spending orgy that Democrats jammed through the House this week lie five words that could drastically undo two decades of welfare reforms.

The very heart of the widely applauded Welfare Reform Act of 1996 is a cap on the amount of federal cash that can be sent to states each year for welfare payments.

But, thanks to the simple phrase slipped into the legislation, the new “stimulus” bill abolishes the limits on the amount of federal money for the so-called Emergency Fund, which ships welfare cash to states.

From The Times…..

Wildcat strikes spread to power stations across Britain today with more than 2,000 workers at 17 different sites walking out in protest against the use of foreign contractors.

Around 700 staff walked out of the Grangemouth oil refinery in Scotland and 400 more staged an unofficial strike at a refinery in Teesside as workers lent their support to a three-day strike at Total’s Lindsey oil refinery near Grimsby.

The wave of renegade strikes has also hit power stations including Longannet in Scotland, where 500 mechanical contractors have downed tools. At least 17 sites have seen strike action thus far and talks about further walkouts are ongoing at other installations, including the Sellafield nuclear plant.

From Reuters…..

Resource-poor Japan just discovered a new source of mineral wealth — sewage.

A sewage treatment facility in central Japan has recorded a higher gold yield from sludge than can be found at some of the world’s best mines. An official in Nagano prefecture, northwest of Tokyo, said the high percentage of gold found at the Suwa facility was probably due to the large number of precision equipment manufacturers in the vicinity that use the yellow metal. The facility recently recorded finding 1,890 grammes of gold per tonne of ash from incinerated sludge.

News From Pakistan And Mexico

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From Bloomberg…..

The steepest decline in Mexico’s peso in 13 years blindsided everyone from UBS AG economists to Gustavo Huitron, the local marketing manager for Mercedes-Benz.

After weakening 20 percent last year, the currency fell to a record low of 14.4484 per dollar today. RBS Greenwich Capital Markets in Greenwich, Connecticut, now predicts another 3.8 percent drop by June 30. The peso’s worst performance since 1995’s so-called Tequila Crisis is being driven by the U.S. recession and falling oil prices, which are cutting Mexican exports and government revenue.

And from pakwatan.com….

Pakistan Electric Power Company (Pepco) is under enormous miseries, facing a shortage of 10,000 tones a day supply of fuel oil to its power producing units as the consignments of Pakistan State Oil (PSO) remained stuck up at the port.

The situation is accordingly resulting into a power shortage of about 600 MW in the system and no turn around in the situation is possible before Monday, February 2, 2009 when the PSO would get its consignments cleared at the port in Karachi.