大象传媒

NEW LIBYA - NO NEW WISDOM

Should New Libya be modelled on our shining example Paul?

Nuff sed.

Great! Specultation pushes the oil price to ridiculous levels, then the vultures cash in by "...hedging their bets towards a second downturn..." So far as I am concerned this should be deemed criminal activity. But no doubt if it gets out of control more cuts will be deemed necessary to deal with further socualised debt.

Meanwhile we have this:

It really would have been cheaper to let capitalism take its course, let the ones without married parents go bankrupt, and start again. Banking should be a social service!

investment is not the same as speculation. an investment is something with a known return at the end. people 'betting' on a downturn etc is speculation. it is a usa jedi mind trick to call speculation investment or investors because it hides the gambling.

the oil price is speculation fuelled by competition between hedgies etc not to 'lose out' and so come in with a worse performance than their competitors. the person who 'missed the oil train' will be treated with contempt. yes it is as silly as that.

when you start to bribe people they will want ever increasing bribes. so bribing is just a temporary measure as the basic requirement of 'freedom' hasn't been fulfilled. bribery = bad parenting/bad statecraft.

> speculators pile in (there are 2.5x the number of call options to put options on oil futures markets right now)

Paul, to be clear it is actually very hard to 'speculate' on oil because the contango introduces a cost to rolling the contract forward to the following month. It's much more likely that the actors in the options market are the treasury department of large multinational corps who are trying to buy out risk for a worst-case scenario.

To truly speculate on oil one needs to be able to take physical delivery of the product and store it to play the contango whilst negating the contract costs. However this is a pretty capital intensive course of action and can not really be undertaken by your average hedge fund (Goldman Sachs however have invested in their own oil storage depot I believe).

Finally, It is often unclear exactly what type of impact an oil spike has on the developed world economies. What the big oil importers lose in the current account they gain in the capital account as all these petro-dollars get recycled. This surpresses treasury yields which forces down the global risk free rate which actually encourages investors to chase yield in more risky assets.

From FT Tilt:

"In other words, remember the global liquidity recycling game thanks to global monetary imbalances. The oil windfall endows Gulf investors with massive surpluses, which are then invested in US Treasuries. This keeps the global risk-free rate low, triggering a global search for yield, a boon for EM assets.

That's why Turkey -- which has a structural current account deficit -- often outperforms even during oil price and inflation shocks as Gulf investors invest in the country. That's crucial food for thought while Turkish stocks and the lira fall owing to fears of fiscal and current account deterioration in the importing nation."
[Unsuitable/Broken URL removed by Moderator]

#2

Agree, it is disgusting 'violent' behavior (it hurts a lot of people)so why is it always reported in a dry 'matter of fact' way as if this sort of hugely damaging speculative financial behavior is normal. It is no more normal than stealing 10% of the petrol out of peoples tanks in the dead of night once a week, confident that it will not be noticed.

We dont accept rigged roulette wheels or doped horses defrauding people so why do we accept the equivalent in financial and comodities markets with such crass indifference?

I remained hopeful for a little while but I just dont think this will end well now. It is the height of financial irresponsibility and folly to 'play the markets' to get a cash advantage out of this turmoil when all the global economic buffers are already stretched to the limit (interest rates / QE / Austerity.

All they can see is profits for their trading house and corresponding bonuses for them, but this time, the risk they run in doing so is akin to global financial meltdown with massive implication, it must, therefore, be a crime against humanity. There is very little left in the tank to provide a buffer to allow a carefully designed transition and re-balancing.

Yet nobody, absolutely nobody in a position to do so chooses to reign them in and force them to behave with even a modicum of social responsibility despite their very existence now being at the unwitting and unwanted generous behest of tax payer whom socialised their previous astronomic losses to keep them going.

Generations to come will be aghast at the sheer stupidity of the times we now live in.

All we get are comittees which take a year to offer up watered down recommendations of 'the bleedin obvious'. Decisions which could (and should) have been taken by a LABOUR (ha) government in 5 minutes at the height of the crisis in 2008.

The fools.

4 Jaunty - I agree, but don't blame the Americans for this one. They learned the game from us. In the 'General Theory' Keynes wrote: " Speculators may do no harm as bubbles on a steady stream of enterprise. But the situation is serious when enterprise becomes the bubble on a whirlpool of speculation.."

Keynes knew all about speculation as he was an active and very successful player in the market on behalf of King's College Cambridge, where he was Bursar. However, he also advocated using law, taxes and reform of the money system to make such abuses impossible or unprofitable. In "The End Of Laissez Faire" (1926), he concluded: "I think that Capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself is in many ways extremely objectionable."

The US "Jedi mind trick" which I personally find particularly emetic is the use of the word "compensation" for executive pay. It is the rest of society which needs compensating for their activities!

@5 Jericoa: Society needs to change and we can all play our part, however small, by promoting rationality in our own social circles.

I remember the vilification of Barbara Castle when she introduced the breathalyser in the '60s. For many years, people tended to worry about being caught more than about killing someone. Now however, drink-driving is generally socially unacceptable.

Last week a local youth was sentenced to 4 years' imprisonment for reckless driving which killed his passenger.

There is no doubt in my mind that the economic fallout from the financial crisis will cause a considerable amount of illness and early death. But those resposible have been paid off and allowed to retire to their country estates.

We should make company directors personally liable for the consequences of their actions, by extending criminal negligence laws to cover such crimes as "Banking without due care and attention", and "Reckless Banking".

What a wunch!

An increase in the price of oil is an increase, if reflecting economic fundamentals, in labour time.
An increase in labour time to extract it - the easy stuff has been extracted ahead of the more difficult stuff.
And so an increase in labour time to produce commodities - as virtually all commodities require some kind of energy input.

As means of subsistence, e.g. bread, rice, etc require energy to produce & distribute, this means the price of reproducing labour, the wage, has upward pressure.
More labour time spent producing means of subsistence means less time either producing means of production, either replacing those used up or making new investments.
Or, alternatively, less time making luxuries for the rich to buy with their profits.

It all adds up to either:
1. A decline in the rate of exploitation (s/v in Marxist terms) & downward pressure on the rate of profit
2. A decline in living standards to maintain profitability & the risk of revolution
3. Or some combination of the two - decline in profitability & standards of living.

There is also the factor called the organic composition of capital - the ratio of constant capital to variable capital (wages).
As constant capital includes energy inputs the organic composition of capital is also likely to rise.

So in Marxist terms, v & c rise but c rising more, both sqeezing s (the rate of profit) & the increase in v is not enough to prevent a decline in living standards.

The classic revolutionary scenario.

In the UK this is going to cause a big inflationary spike and the libertarians will be baying for interest rate rises again.

It will also choke off any prospect for growth, which as I keep banging on about on 大象传媒 blogs is ESSENTIAL if the UK is not to go the same way as Eire with rising welfare spending, falling tax take which will then cause the debt level to rise, not fall.

Osborne had better start thinking hard about Plan B because the odds of Plan A surviving longer than Gaddafi are shortening.

The right approach is clearly to try and encourage progressive movements in the arab world to embrace peaceful deomocratic change, but as we saw with the hard line the Israelis took with their neighbours leading to the rise of Hamas with a popular mandate and with the victory of radical islamic politics in Algeria a few years ago, there is a tendency that led to the current regime there, anyone who thinks the West can manipulate the situation to get regimes sympathetic to Israel's occupation into power will end up achieving the exact opposite.

This is the strategic moment for Obama to harden his approach to the Israelis and to come down hard on the settlements issue. This would send the right message to the arab world and ensure that the successors in Egypt, Libyia etc do at least start with some shared vision for the future of the Middle East post-tyrants.

#4 Tom
Good post. Let's also remember the stream of tankers slowed to a snails pace around the world delaying delivery to take advantage of the expected spike in oil prices as the effects of chucking the kitchen sink by way of stimulus at the global economy work through. Sort of virtual oil storage facility?
I attended a seminar last evening conducted by Finance Brokers. Sad I know, I should get out more. They indicated that banks that do close the 2 of 10 applications they consider, are insisting on 5 year reviews for commerical property mortgages so the 25 year mortgage as we know it, is in reality no more. I held from asking whether this is evidence of the proper pricing of risk or outright profiteering, wrong audience.

4

brent has had an $8 range so far today. who needs to take delivery?

@jaunty, "an investment is something with a known return at the end". No it isn't. An investment is made to produce a future revenue stream, but the return cannot be known with certainty. There is always a risk that the investment will fail. There is nothing wrong with this, only with the nature of the 'investor' which under capitalism is he with the dosh, i.e. money making money.

Mr Mason writes:

What that means is oil prices will be, tendentially, higher than they would have been where wealth is simply hoarded and then spent in the boudoirs of Park Lane hotels. [End quote]

Does anyone know what 'tendentially' actually means ?

The entire sentence seems badly constructed to me.

Mr Peston claims to have a sub-editing team for his blog. Does Mr Mason as well, I wonder ?

tendentially - [to paraphrase the definition] "having or showing an intentional bias"

12

yes government bonds can 'fail' and you will not get the return. punting on oil isn't investing.

i welcome a debate about the difference between investing and speculating as that is where the world crisis lies.

if we say one has more risk than the other as to the return then were cdos
[ ] 'investments'? the crisis resolves around mislabelling speculation as investments which is what the ratings agencies did. A fund may have thought they were getting triple A [although one wonders they did no research themselves] but what they were getting was of a greater risk than that.

given that people borrowed money in the short term capital markets to buy these 'investments' compounded the risk.

risk management is a skill with an ancient history from the advice of jacob to his sons to enter a city by different gates to spreading cargo across a number of ships etc.

if you can mislabel speculation as investment then you can make a lot of money.

in the meantime, to keep with the popular usage, i am going to 'invest' in some lotto tickets :)

#13 Perhaps the most important section in Marx's Capital is entitled, "The Law of the Tendential Fall in the Rate of Profit".

So Paul's in good company.

Here's a summary of that section in Capital:

The Law Itself

With a given rate of surplus value, the rate of profit falls as the organic composition of capital rises.

This rising composition of capital is a corollary of the specific methods of increasing the productivity of labour characteristic of a capitalist society.

The falling rate of profit is not the result of a decline in the productivity of labour.

The falling rate of profit is quite compatible with an increase in the amount of surplus value and so profit, indeed it is necessarily associated with such an increase.

The rate of profit falls because a large total surplus value is spread over a still larger total capital (because of the increasing organic composition).

Two fundamental criticisms:

Although the technical composition of capital should rise steadily under capitalism, it is not so clear that the value composition will so rise.
The value composition relates the value laid out in means of production to the value laid out in labour power and not the physical quantities.
If the productivity of labour in producing means of production increases then the value of constant capital does not increase as rapidly as its quantity (more machines of a new type might be cheaper than fewer machines of an old type).
Of course the value of labour power is also declining as the means of consumption are cheapened.
It is at least conceivable that if productivity increases in the production of means of production run far ahead of productivity increases in the means of consumption then the organic composition may not rise at all.

There is no a priori reason why the effect on the organic composition should outweigh the effect on the rate of exploitation.
(A increasing productivity implies a rising organic composition and a rising rate of exploitation. While the rising organic composition reduces the rate of profit, a rising rate of exploitation increases it).
It the last analysis it is an empirical question whether productivity will be sufficiently rapid for the increase in the rate of exploitation to counteract the increase in the organic composition so that the rate of profit rises rather than falls.
Counteracting Factors

In practice the rate of profit does not necessarily fall, because capitalists take a series of measures to sustain it.

The counteracting tendencies are:

Increasing the intensity of exploitation
By lengthening the working day
By intensifying labour
Reducing wages below the value of labour power
Cheapening the elements of constant capital: the value composition of capital may not increase as much as the technical composition because the elements of constant capital (raw materials and machines) become cheaper.
Relative over-population: accumulation provides a body of cheap workers who sustain branches of industry with low organic composition and high rate of exploitation.
Foreign trade: increases the rate of profit by cheapening the elements of constant and variable capital. But also increases the rate of accumulation that in turn supposedly reduces the rate of profit.
If some industries, e.g. railways, have a low rate of profit, this increases the rate of profit for other capitals by providing cheaper inputs.
Development of the Law鈥檚 Internal Contradictions

The role of crises in capitalism.

The capitalist then has to realise his surplus value by selling his commodities.
Capital has to constantly expand its market.

A crisis appears as the inability of the capitalist to realise his surplus value, but that it has its origins in the conditions of production of surplus value.

The capitalist mode of production tends to develop the forces of production without limit, but this development comes into conflict with the need to realise surplus value.

The overaccumulation of capital leads to a fall in the rate of profit that is checked by the periodical depreciation of existing capital, that itself upsets the circulation process, leading to a crisis and a stoppage of production.

Thus the contradiction between the forces and relations of production gives rise to a crisis that permits a renewed bout of accumulation by restoring the rate of profit, paving the way for another crisis.

The real barrier of capitalist production is capital itself.
Not nature as the classics had argued.

The processes of concentration of capital and the declining rate of profit reinforce one another: the higher the development of the productivity of labour and the organic composition of capital, the greater the advantages of the large capital. Thus a fall in the rate of profit hits the smaller capitals which are unable to survive. Thus a fall in the rate of profit produces both unemployed capital and unemployed labour.

This overproduction of capital (i.e. too much capital to be employed) implies overproduction of commodities (i.e. the redundant capitals cannot sell their commodities to realise their profit), but is essentially the overaccumulation of capital.

For the economy as a whole, accumulation can be checked by a shortage of labour, which can increase wages & so prevent additional capital being employed without causing a sharp fall in the rate of profit.

If the rate of profit is to be restored some of the capital must be removed.

This happens through the destruction of capital as factories close, the devaluation of credit, the losses made in the market & the depreciation of elements of fixed capital as prices fall: a commercial crisis and the collapse of credit.

On the other hand the crisis creates unemployment and the conditions for a fall in wages and so restoration of profitability, while the competitive struggle drives all capitalists to adopt the most advanced methods of production to economise on labour and to cut costs.

Thus the crisis prepares the way for a resumption of accumulation.

The overproduction of capital that precipitates the crisis is only an overproduction within capitalist social relations; it is overproduction in relation to the possibilities for profit.

It is the possible threat of uprisings across the Middle East that would have a major impact on oil prices rather than Libya with a small proportion of oil production. Unless others 'pile in' one would not expect the price to go much higher than $120.

#16
I would suggest the difference between investment and speculation is in the asymmetry of information.
Investment suggests the deployment of capital or other production factors in the hope of securing a positive income stream in the future.
Speculation suggests the deployment of capital/assets in the expectation of making a return based on circumstances/information that are not widely appreciated or available and which the market has not priced into a given investment opportunity. Hence disproportionate rewards.
Woolly definitions for sure (no dictionary used) The difference is in this area, I'm sure.

The positive side of a rise in oil prices is that it accidentally creates a green tax on carbon based fuels. The raised floor of fuel prices could be maintained by increasing tax but balanced by big reductions in VAT which is more regressive than fuel duty.

19

yes certainty of return would imply more of a certain kind of knowledge.

if i 'invest' money in a bond with a guaranteed return and capital preservation [like at a building society say] then i have more knowledge than just putting it all shorting oil [or whatever].

if 70% of people who open a florist or restaurant fail within 2 years are they investing or speculating? would people want their pension fund in the bond or the florist?

Investment creates new productive capacity (good). Speculation churns already created productive capacity (bad). Trouble is most of what is called 'investment' is nothing of the sort. We see nothing wrong with this because it's accepted that savings should grow rather than just to maintain their purchasing power. Only labour is entitled to a share of production. Money making money leads to gross inequality.

14. At 3:56pm on 24 Feb 2011, tonyparksrun wrote:
tendentially - [to paraphrase the definition] "having or showing an intentional bias"

17. At 4:58pm on 24 Feb 2011, duvinrouge wrote:
#13 Perhaps the most important section in Marx's Capital is entitled, "The Law of the Tendential Fall in the Rate of Profit".

Thanks to you both for your help. I had forgotten after twenty years of my reading Das Kapital !

I wonder what will happen if Scotland was to become independent, do you think all those who proclaim that the Scots are subsidy junkies will realise that North Sea Oil revenue helped keep the Westminster from going bust in the 70's and is helping keep it afloat at the moment and at its high price just now the money is pouring into the warship that is due to be scrapped when it returns that if full of all nationalities who is paying for that ??? just asking

HMMMM - INDEPENDENT SCOTLAND (#24)

That would mean they had a base for nukes they can't fire and, having 'blown the Megrahi', no protection from mates in USA.

A prime target for a bit of IBM practice, from a rogue state, I reckon.

A CDO is neither an investing nor speculating tool. It is a tool to diversify risk, much in the same way that a CDS enables a position to be hedged and risk off-set.

Mr Brammar, one can surely speculate on devil's excrement...but whether one does it successfully is another matter. A lot of recent net long positions are surely financial and not hedging?

How does Belgium compare to Turkey in the petrodollar escalator? Plus as i read in the FT the King is now having to buy off his 'citizens' so no more spare dosh for propping up western capatilism (plus he seems to be promising to buy oil to improve the quality of his rubbish oil by blending in some good stuff like what Libya had)

In his 'General Theory'鹿, Keynes, who did both, described the difference between speculation and investment (or 'enterprise' as he often called it). He describes 'speculation' as the "activity of forecasting the psychology of the market" , and 'enterprise' as "forecasting the prospective yield of assets over their whole life."

Keynes' main point is that the organisation of markets encourages, even enforces, behaviour which is antisocial and detrimental to the community at large. He is uncharacteristically long-winded in this chapter, so I shall stitch together some extracts, hopefully without distorting his meaning.

"..the Stock Exchange revalues many investments every day and ... give a frequent opportunity to the individual (though not to the community as a whole) to revise his commitments. It is though a farmer ... could decide to remove his capital from the farming business between 10 and 11 in the morning and reconsider whether he should return to it later in the week.

Of the maxims of orthodox finance none, surely, is more anti-social than the fetish of liquidity ... there is no such thing as liquidity of investment for the community as a whole.

..it is the long-term investor, he who most promotes the public interest, who will in practice come in for most criticism, wherever investment funds are managed by committees or boards or banks.

These tendencies are (the) outcome of our having successfully organised "liquid" investment markets. It is usually agreed that casinos should, in the public interest, be inaccessible ... And perhaps the same is true of Stock Exchanges. ...

Keynes advocated using law and taxes to "force the investor to direct his mind to the long-term prospects..". He also expected and welcomed a much greater role for the state.

鹿Chapter 12, 'Long Term Expectation'.

Mojomogoz,

But what affect does the options market have on the real price of oil? Surely its has the same affect as if you and I placed a bet on the price of oil for some future delivery. It is a side bet, with no physical connection with the underlying asset - we are the only counter-parties in the deal. The idea that our bet would in some way carry the same weight as the effects of major geopolitical events is somewhat egotistical, even for self-proclaimed "masters of the universe" don't you think?

I fear that blaming 'speculators' has become the defacto response to any extreme jolt to our post-war benign economic existence. It is both lazy and dangerous - it is preventing us from identifying the true underlying causes and putting our intellectual capital to work to fix them.

Blaming speculators for driving up the price of oil carries the same credence as blaming speculators for creating the troubles in Greece, or the precipitous drop in an organisation's share-price.

I went on one of these trading seminars and the technique we were taught had nothing to do with the price of anything. basically you just look for a particular shape on the curve and it doesn't matter whether price is going up or down, and you can sell before you buy, it's just a bet that the curve, which has a particular shape on the micro level, will lead to another shape in the next few hours, because the movements follow a statistically predictable pattern at certain 'threshhold' configurations.

#20 Watriler
I know there is pain involved in high fuel costs on which many are forced to pay to earn a living/survive. For the UK in particular, talking down exchange rate and increasing VAT are both desirable in making energy and consumption costlier as we can all see that it is beneficial for the economy to restructure away from dependence on cheap energy and consumption of tat from China in the long term. Whether short term exchange movements and tax can change the propensity to use energy/consume tat in the long term is another thing altogether.

#21 Jaunty
investing in a florist - a perfectly civilised investment to choose as an example. No reason why it should succeed or fail as an investment per se. With my knowledge (information) of the success rate of small business start ups, I would not invest as there is a significant risk of failure. However, on the other hand, I may have knowledge that shortly a residential home, funeral parlour, and a cemetary are all about to open in the vicinity of the investment in the foreseeable future. The information mitigates the risk and the price of the investment (sans knowledge) is distorted (cheaper) by the asymmetry. I would call this speculation because potential parties to invest do not have the same information on the future. Note: risk doesn't vanish entirely - funeral parlour may source flowers wholesale, residential home may ban floral tributes etc etc. Soros had the insight knowledge to speculate that GB membership of ERM was unsustainable. Another example, in "The Big Short", there was a pool of investors who called the failure of the property bubble in the US - this is still speculation. The short investors were desperately seeking information all along to validate their speculation. They couldn't quite believe there were so many mugs on the other side.
#30 the above still applies because the information is the trading patterns which we do not all have access to/understand. Speculation may be based on these patterns, which is why bubbles are caused because the patterns show a one way bet. Trouble is patterns do not always predict the future and the black swans sometimes come out in force.

#7

The trouble with rationality is that it does not inspire people.

Mathematicians endlessly calling equations (as seems to now be their want) 'beautiful' does not make them so. For most people the level of understanding required to appreciate that beauty is something they will never appreciate.

Yet everybody can instantly appreciate the beauty of a sunset or a temple or a mausoleum.

Non of this is new.


The ancients knew that in order for rationality to be embedded and become useful social behaviour then it has to be embodied within something which is inspirational, not necesarily rational (on the face of it). Hence we have the Torah, Bible and the Koran with advice on everything from sexual harrassment to being careful about eating pork.

Now culture has gone global, but we dont have a global culture all we have is an eclectic collection of hopelessly outdated 'manuals for living' (albeit dressed up in the inspirational) which are increasingly part of the problem not the solution or..simply...irrelevent.


As I have quoted many times on here 'where there is no vision the people perish' ..Taken from the oldest manual of all.

Vision...inspiration... beauty create 'selfless acts'.. you need 'selfless acts' to build a society.

Rationality does not seem to create 'selfless acts' in fact it produces quite the opposite on an individual level which, amplified through the masses, creates the dangerously unstable world we are increasingly living in.

What science seems to refuse to acknowledge is that science itself is not rational. There is not much that would conform to rationality in the quantum world of the double slit experiment or hardy's paradox (now proven).


Indeed, you could argue that any physical system must have 'irrationality' engineered into it in order to create ..well creation and diversity and beauty.

Ask yourself this.. what was rational about a fruit seller dousing himself in petrol and setting himself alight in the square in Tunisia?

Whether it be the quantum world or our world, the same themes run through and through and are an inherent part of a cycle.

Not sure where I am going with this but it appears to be finished now so I will stop.

@33 Jericoa BEAUTIFUL MATHEMATICS:

This is the first part of a vid fronted by Arthur C Clarke about the Mandelbrot set, 'The Colours Of Infinity'. The first couple of minutes are a bit pretentious, but after that it gets good.



(A few years ago there was an elaborate hoax the the M-set was discovered much earlier (I'm ashamed to say I fell for it!):

)

The M-set is very abstract, but if you understand it you also get an insight into potentially chaotic systems with feedback loops, like the weather, or stock and commodity markets.

As a precursor to an OU course on Fractal Geometry, I read this book:
'The (Mis)Behavior of Markets: A Fractal View of Risk, Ruin, and Reward' by Mandelbrot and Hudson. It was written in very comprehensible language, explaining things that from other sources just seemed gobbledegook.

6 sasha

`The US "Jedi mind trick" which I personally find particularly emetic is the use of the word "compensation" for executive pay.'

This always makes me laugh.

The use of the word `compensation' for executive pay has a very amusing history. As a keen observer of the British class system this always gets me grinning.

A distant ancestor of mine in the early eighteenth century was an attorney who was also the steward to a leading British ducal estate. The time he spent attending to His Grace's affairs was compensated as it was assumed that if he had not been attending to His Grace's estate he would have been attending to his own. In my view this is a reasonable use of the word compensation.

However, it has now become applied to any instance of financial reward to a senior employee. The assumption is made that the person thus rewarded is a gentleman. This is quite absurd. A gentleman does not work for someone else as he has means of his own. One never compensated the butler! In other words a gentleman can never be an employee. Therefore, logically, anyone rewarded with `compensation' should be sacked as they can have no proper place in the enterprise.

An old boss of mine always signed off expense claims with the remark that `it is a poor company that cannot afford at least one gentleman'.

I could now go on to define how a gentleman is expected to behave but I won't. Some of my mother's family were royal servants and they could spot a phoney at a hundred paces. There is a lot of it about....but when you meet a real, proper gentleman the quality stands out.

would it be beyond trading rules to stop the speculation on futures oil and gas price hikes....insider trading is banned so why not the speculation of key national resources that affect the weak and the vulnerable. Oil and Gas companies will never propose it but the rest of us should. Discuss......

POLITICAL PARTIES IN DEMOCRACIES: LIE, BRIBE AND CHEAT (#36)

They also avoid, evade and break, laws of their own making. We are a very, very long way from 'Ethical Globopoly'.

This is why, by my reasoning, over a number of years, we must dismantle Westminster - lock, stock and rotten barrel. As a start I suggest:

SPOILPARTYGAMES

Sasha:

"As a precursor to an OU course on Fractal Geometry,"

you doing the math degree there? Which one? Any good?

@38 Hi Ben

My original degree was joint hons Chemistry & Maths from KCL in 1979. I completed the discontinued OU M.Math in Y2k. Since then, amidst various distractions, I took the (sadly discontinued) history of maths course, and also 5 units from the M.Sc course - mainly for pleasure and to help keep my brain functioning! I'm now contemplating a dissertation.

I would say that most OU maths courses are excellent, some are merely good, and the odd one is mediocre.





The structure of 4 assignments and one exam for each unit is very good and helps one make the most of the course. There is also good online support, and most of the tutors are very helpful. The Fractal Geometry course (M835) was one of the best, as was its third level precursor M337 Complex Analysis. On the whole I have found the OU experience both very enjoyable and rewarding!

Hope this helps :-)

Libya is an enigma wrapped inside a western-propaganda mystery.
Who is the "opposition", which reportedly now controls the eastern city of Benghazi? Was it coincidence that the rebellion started in Benghazi - lying north of Libya鈥檚 richest oil fields as well as close to most of Libya's oil and gas pipelines/refineries?
What is the risk of imperialist military intervention? And does not this potential intervention hold the gravest (literally) risk for the Libyan People?
Libya is not Egypt. Its leader, Moammar al-Gadhafi, has not been an imperialist puppet. For many years, Gadhafi was allied to countries and movements FIGHTING imperialism, in fact castigating imperialism. On taking power in 1969, Gaddafi nationalized Libya鈥檚 oil and used much of that money to develop the Libyan economy. Conditions of life improved dramatically for the people.
For this rebellion against capaitalism, the imperialists planned and connived on how they could take Gaddafo down. e.g. The US launched air strikes on Tripoli and Benghazi in 1986; these killed 60 people, including Gadhafi鈥檚 infant daughter.
How many in the west know about the foregoing?
Devastating sanctions were imposed by both the US & the UN to play havoc the Libyan economy.
After the US invaded Iraq in 2003 leveling of Baghdad with a bombing campaign that the Pentagon called 鈥渟hock and awe,鈥� Gaddafi tried to preserve Libya by making big political and economic concessions to the west: Gaddafi opened the economy to foreign banks & corporations; he agreed to IMF demands for 鈥渟tructural adjustment,鈥� which meant corporations privatizing many state-owned enterprises and cutting state subsidies on necessities like food and fuel.
If the Libyan people suffered (and they did), the suffering flowed from worldwide capitalist economic solutions to getting rid of Gaddafi.
There can be no doubt that discontent with the Gadhafi regime is the underlying discontent with western countries, especially the United States of America.
The 大象传媒 on Feb. 22 showed footage of crowds in Benghazi pulling down the green flag of the republic and replacing it with the flag of the overthrown monarch King Idris, but King Idris had been a puppet of US and British imperialism. Surely, Libyans would know this!
The Western media are basing a great deal of their reporting on supposed facts provided by the exile group National Front for the Salvation of Libya, which has been trained and bankrolled by the US' CIA.
Who wants Gaddafi overthrown?
Wall Street, US & EU corporations - capitalists!
There is no talk behind closed doors about liberating the people of Kuwait or Saudi Arabia. Why not?
As for Egypt and Tunisia, the imperialist-capitalists are pulling every string to get the poor people off the street, back to work, so that imperialist-capitalists can start profiteering again.
What has the US done to liverate the Palestinian people, even after thousands died from being blockaded & bombed by Israel. Rather, the US did everything possible to prevent condemnation of the "Sole Democracy in the Middle East".
Imperialist interest in Libya: Libya is Africa鈥檚 third-largest producer of oil, it has the continent鈥檚 largest proven reserves 鈥� 44.3B barrels. It is a country with a relatively small population, but giant oil companies. This is what makes Libya important and Gaddafi "the devil's excrement".

Saudi will fall and oil will surpass $165/barrel.

Youth unemployment > 20% seems to be the only common factor (Saudi is 25%)

What is the rate in the UK ?

oh dear

'Last week, the youth unemployment rate reached 20.5%, its highest since comparable records began in 1992.'

/news/education-12565041

not good is it ?

In the meantime, some Arabic protest culture is spreading to mainstream Europe. My Berlin cousin (the German branch of the Russian side of the family) is attending this demo tomorrow:

[Unsuitable/Broken URL removed by Moderator]
It's a protest against the German Defence Minister, Karl Theodor Maria Nikolaus Johann Jacob Philipp Franz Joseph Sylvester Freiherr von und zu Guttenberg, who has had to give up his doctorate because of plagiarism. He however refuses to resign his post and, at least for now, has Frau Merkel's support.

/news/world-europe-12566502


The aim of the demo is to use the Arab insult of showing (and I suspect throwing) shoes to demonstrate contempt. They are also very angry that the German equivalent of 'The Sun', 'Bild'. Europe's highest circulation tabloid is supporting Guttenberg.

This comment was removed because the moderators found it broke the house rules. Explain.

@40 Your passionate opposition to the US seems to have blinded you towards the complexities and uncomfortable (to you) realities of the Libyan situation.

In this case anyway, I would say that it is a great mistake to assume that "The enemy of my enemy is my friend".

I have just been watching aljazeera, which reports that up to 90% of Libyan diplomats abroad have deserted Gaddafi, and reported an emotional speech in Geneva by the Libyan representative at the Human Rights Commission explaining his defection "to the people" and begging the UN to "save his country".

In the thirties well meaning Westerners supported Stalin despite the fact that he was a callous mass-murderer (whose victims included members of my family.)

Gaddafi has always been brutal and ruthless. I post here under my own name - Libyans couldn't. Don't they deserve the same rights as we do?

Also, you described King Idris as a "puppet". This a gross simplification. Would you have described Mrs Thatcher as a US puppet, or merely as someone who believed that her country's best interests were served by a particular policy? I was strongly opposed to Mrs T, but I would never have described her as a puppet.

#Sasha

Whilst we are waiting for your defamatory comments @ #42 & #43 to appear, how about giving us a list of books in your library. (surely the mods will let that through)


#Paul

You were going to give us an update on '50 books', I know global events might have overtaken you but Kulture surpasses mere history in the making.

#Jericoa

Good rant (stream of consciousness)

Ask yourself this.. what was rational about a fruit seller dousing himself in petrol and setting himself alight in the square in Tunisia?

Another question might be,

'how far would I have to be pushed before I consider dousing myself in petrol and setting myself alight in the town square ?'

Which then begs the question, 'what should be done with the Leaders who allow the situation to develop (whether through action or inaction) where someone may be considering the question above ?'

Barbarism may be making a comeback (did it ever leave ?)

@45 Bob - LOL I need to catalogue the books first I think: it might take some time!

I don't think my remarks @42 and 43 were particularly defamatory, but I know there was a problem with at least one of the links. It was about this story:
/news/world-europe-12566502
There is a demonstration planned in Berlin tomorrow which a distant cousin who is a good friend will be attending. I'll let you know what happens :-)

I suspect we need to look beyond the immediate events in Libya. It seems likely that, as a country, there will be severe disruption for some time. I hope they avoid a full civil war, but it seems to be a possibility.

Oil prices are spiking again and Paul Mason has outlined the immediate effects. It is likely to produce stagnation at best, and maybe send the UK into a recession. These conditions are not good for industry; the reasons to invest, expand and employ, fade. In these conditions only the state can step in to spend the money to get the economy moving. The problem is that I doubt the present government will understand where we are economically; so they won't spend and will continue with austerity, thus doing huge damage as company after company fails on the back of a massacre of public sector jobs. The poor will find they have no support. The middle income households will see that there living standards fall rapidly. Crime will rise, but the police won't be able to respond. I doubt that the Chancellor will accept that it will be caused by his policies failing. Everyone else will be blamed.

I suspect that few really understand the way the economy now works and all the essential interactions; the change wrought by the collapse of Bretton Woods has yet to be believed and to sink in to our consciousness. As a result, politicians and economists usually pull their control levers in the wrong direction and at the wrong time to try to get out of trouble. The fact is that a different model of the economy and the controls for it are now appropriate.

Think about the economy as being divided into sectors:
The Government Sector
The Non Government Sector which is sub-divided into:
The internal non-government sector and the external non-government sector.
Our GDP comes from these sectors; there is nowhere else.

The spike in oil prices is/will affect the whole world, all will suffer; for all, growth will falter, for many GDP will stagnate or fall. We therefore cannot look to the external non-government sector for growth.

The internal non-government sector is flat-lining just before hundreds of thousands are put on the dole; no growth there then.

The only engine for growth left for the UK economy is the government sector; i.e. the government needs to spend; but its cutting! Exactly the opposite of what is needed to produce growth. So we will sit around and wait until other countries throw a few orders our way; then we may gradually expand again. In the meantime, huge real damage will have been done; viable companies will have been destroyed and many lives, hopes and ambitions wrecked by forces outside their control.

I suggest that the foregoing means that the government policy is exactly the opposite of what is needed. But what about the deficit???? Why borrow when money can be created debt free (providing it is fed into the economy in the right way)? The usual answer is that its inflationary. True if the country does not have the productive capacity to meet the needs of its population. Surely it is better to keep everyone in work, building greater productive capacity rather than see more and more on the dole, productive capacity declining, month by month, If inflation increases, why use just monetary measures to control it? Taxes are more effective, more quickly as a control measure. The financial crisis of the last 3 years has seen trillions literally destroyed. If those losses are all realised, our economies are wiped out. Somehow, those losses need to be covered. Money born of debt won't be sufficient now, it obviously will exacerbate the problem. Only new, debt free money will suffice.

#46 Sacha,

excellent link, not only had he 'lifted word-for-word from the work of others' the picture shows he has been abusing the Grecians since 2000 :)

I am green with envy over your library, mine consists of a couple of text books (schaums data theorems etc.) that I can't get anybody else interested in, mostly I hassle others to lend me books which I then pass on to others I think would benefit from them, when questioned about the whereabouts of a particular book I will subvert the conversation by giving them a different book (borrowed from someone else).
One part of me loves books on shelves, row upon row of collected adventures, another part of me screams that books should be read not collected (like butterflies flying free rather than pinned to boards, I would not know of the existence of such beautiful creatures if it wasn't for the boards)

The catalogue of books will tell us more than an autobiography ever could.

#47 SleepyDormouse

'he financial crisis of the last 3 years has seen trillions literally destroyed'

yes but it is only money, the house is still standing, crops are still growing whether there is money or not.

Only Government and Finance cannot work without money, for everyone else there is trade.

Finance (with the complicity of Government) broke 'money', they have, for the last three years been running round like headless chickens trying to apportion the blame onto others.

Well it won't wash.

I agree a new system is desperately needed but I figure that it will have to get a whole lot worse (for the middle classes) before any kind of sea change is contemplated.

In the mean time, start doing your own thing, sideline them, they are irrelevant.

@48 Bob - A picture is worth a thousand words; here's a poster advertising today's Berlin demo. The students have deliberately chosen an Arabic symbol of contempt.

[Unsuitable/Broken URL removed by Moderator]

Re my library. I got much of my education from public libraries, but they are not very 'well-endowed' in my local area. I have bought many books I originally borrowed from libraries around the UK. Some are second-hand ex-library copies of out of print books which public libraries decided they no longer needed. For example I have ex-library copies of Glubb's complete Histories of the Arab empires and Life And Time Of Muhammad. I also inherited many books from my parents; some are fascinating, but certainly not in print now. One gem is the Bernard Shaw Ellen Terry letters.

I like to see my collection as a sort of "Book Ark" - a bit of an insurance against technological catastrophe. :-)

@47 SleepyDoormouse I agree, but we need to spend on expanding our productive capacity so we can meet as many of our own needs as possible.

@50 I do wish there were a consistent moderation policy!

/blogs/thereporters/gavinhewitt/2011/02/europe_twisting_over_libya.html

50. At 12:36pm on 26 Feb 2011, Sasha Clarkson wrote:
"@47 SleepyDoormouse I agree, but we need to spend on expanding our productive capacity so we can meet as many of our own needs as possible"
--------------------------------------
Yes, but at the moment there seems to be very little action in this direction, no matter what the politicians say. Productive capacity comes in many forms and there will always be choices. To me, one of the cornerstones is a well educated work force to as high a level as possible. It beggars belief that we are encumbering our children now with so much debt. Its not necessary, its damaging to them and it sets the wrong example - it shrieks 'debt is OK'. We need to be sending the exactly opposite message. The fact that they may earn more is irrelevant. It is equally irrelevant that we supposedly cannot afford it as a country. Given the will, we could.

Oil, oil, oil - black gold!
If prices were rising before, look out now:
Similar unrest is coming to The Kingdom of Saudi Arabia, with workers now calling for a 鈥淒ay of Rage鈥� demonstration in the Capital, Riyadh. The date set is March 11, 2011.
There have already been protests last week in the City of Qatif and other towns in the country鈥檚 oil-rich Eastern Province. Among the demands are the release of political prisoners and a whole agenda of social reforms.
Sadek al-Ramadan, a Human Rights Activist in Al Asha, Eastern Province has noted that the people here are watching the protest movements across the region. The people want a piece of the action.
Al-Ramadan said that there are 鈥渄eep frustrations鈥� in Saudi over high levels of poverty, unemployment, poor housing and widespread corruption. Saudi Arabia is the world鈥檚 TOP OIL EXPORTER; its Gross Domestic Product last year was estimated at $622B.
This week there was a closed meeting among the Saudi monarchy about the growing unrest. King Abdullah and King Hamad al-Khalifa of Bahrain were among the attendees. The Saudi government is so worried that it has released a $37B social fund to tackle youth unemployment and the chronic shortage of affordable housing. Also there was a 15% hike in salaries for government employees.
Al-Ramadan said that while the country鈥檚 minority Shia communities have 鈥渇elt discrimination and repression most keenly over many decades, their grievances are also being shared increasingly by the majority of Sunni people鈥�.
Saudi Arabia鈥檚 population is estimated at 19M, with an external workforce of @ eight million. So, while people are clamouring for jobs, what's with the external workforce of about eight million? What's with the unemploument rate of about 50% among Saudi youth, whether Shia or Sunni? With a GDP of 622B, why is there such an extreme shortfall in housing and education?
The people want a more transparent government. They want an end to corruption. And of course, they want better distribution of wealth and welfare.
The Saudi authorities must be aware of the escalation of anti-government protests in the Persian Gulf Island State of Bahrain, which is only an hour鈥檚 drive away from the Eastern Province. Before the recent rallies began in Bahrain (February 14), small groups of Bahraini protesters were calling for relatively mild constitutional reforms. But after a week of heavy-handed repression (seven civilian deaths and hundreds of injured), the protest movement in Bahrain is now bringing out @ 200,000 people every night is now demanding the overthrow of the al-Khalifa Monarchy.
Saudi's position is precarious. Too little reform, too much repression could set off the kind of full-scale uprisings that are sweeping the Middle East.
Up to 90% of the country鈥檚 oil production and processing is located in its turbulent Eastern Province, where the state-owned oil company Saudi Aramco has its headquarters. Some 80% of Saudi Arabia鈥檚 national income is due to its oil and gas sectors.
The oil wealth of Saudi Arabia is concentrated almost entirely in the Shia-dominated Eastern Province - that location in Arabia where complaints run deep and political alienation runs even deeper.
Beneath the appearance of calm, the Saudi royal family and King Abdullah have been consulting with the other Gulf Sunni sheikhdoms - from Bahrain, the United Arab Emirates to Qatar and Oman.
The devil's excrement has indeed hit the fan, and is being far-flung across all oil-producing countries. Like you and others, I have to wonder what will happen, especially if Gaddafi somehow manages to hang onto Libya.
What a black, oily mess!