the visible hand

it is the theory which decides what can be observed – einstein

Archive for June, 2008

Democrats attempt to go “green”

Posted by ecoshift on June 25, 2008

Here’s evidence supporting the need to lobby for policy changes, rather than depending on personal/individual purchasing decisions, to improve the ecological and social footprints of products sold in US markets. No amount of guilt induced hand-wringing will enable individual purchases to push markets into green compliance in a reasonably effective time frame — the products we want people to buy simply don’t exist.

The Greenest Show on Earth: Democrats Gear Up for Denver – WSJ.com
Democrats Gear Up for Denver
From Organic Fanny Packs to ‘Pure’ Trash,
Party Planners Face Logistical Nightmare

By STEPHANIE SIMON
June 25, 2008; Page A1

DENVER — As the Mile High City gears up to host a Democratic bash for 50,000, organizers are discovering the perils of trying to stage a political spectacle that’s also politically correct.

Consider the fanny packs.

The host committee for the Democratic National Convention wanted 15,000 fanny packs for volunteers. But they had to be made of organic cotton. By unionized labor. In the USA.

Official merchandiser Bob DeMasse scoured the country. His weary conclusion: “That just doesn’t exist.”

Ditto for the baseball caps. “We have a union cap or an organic cap,” Mr. DeMasse says. “But we don’t have a union-organic offering.”

Much of the hand-wringing can be blamed on Denver’s Democratic mayor, John Hickenlooper, who challenged his party and his city to “make this the greenest convention in the history of the planet.”

Convention organizers hired the first-ever Director of Greening, longtime environmental activist Andrea Robinson. Her response to the mayor’s challenge: “That terrifies me!”

After all, the last time Democrats met in Denver — to nominate William Jennings Bryan in 1908 — they dispatched horse-drawn wagons to bring snow from the Rocky Mountains to cool the meeting hall. Ms. Robinson suspected modern-day delegates would prefer air conditioning. So she quickly modified the mayor’s goal: She’d supervise “the most sustainable political convention in modern American history.”

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Dupont spokesman says “inflation is here bigtime”

Posted by ecoshift on June 24, 2008

Sure gas prices have been going up 10 cents a week. And, every time you go to the grocery store prices seem to be noticeably higher, but just wait. While “macroeconomic data” show “little evidence that higher commodity prices have been passed to consumers” the corporate sector has been shouldering “soaring”, even “staggering’, increases in costs. Now they are raising prices: 20%, 25%, 60% cumulative increases and even a one time 95% increase in iron ore prices.

The Fed is expected to address this circumstance by expressing concern about inflation, but to carefully avoid sending any signal that it will actually do anything about it. It’s just too risky to bet that raising rates, further slowing down our already slowing economy, will have significant impact on the combination of speculation and global demand that is driving up global commodity prices.

So couple rising global prices with low Fed fund rates that leave the dollar vulnerable to further declines.

This would be a good time to have a large cellar full of rice, beans and potatoes; a well-fertilized producing veggie garden; a decent orchard; and a few junked cars laying about your property for ready cash.

Great time to sell used logging and milling equipment for scrap.

Tighten your belts…

FT.com / World – Spectre of inflation over global economy
By Francesco Guerrera in New York, Krishna Guha in Washington and Javier Blas in London
Published: June 24 2008 14:55 |

The spectre of inflation returned to haunt the global economy on Tuesday as companies ranging from Dow Chemical of the US to South Korea’s Posco unveiled sharp price rises to combat the soaring cost of energy and raw materials.

The moves by Dow, the biggest chemical group in the US, and Posco, the world’s fourth largest steelmaker, came as Charles Holliday, chief executive of the chemical giant DuPont, warned of rising inflationary pressures in the corporate sector.

“Inflation is here big time,” Mr Holliday told the Financial Times, adding that companies such as DuPont faced “tremendous cost pressures” and had the “obligation” to raise their prices to offset higher costs.

The general price pressure was exacerbated when BHP Billiton, the mining company, said the 96.5 per cent record increase in iron ore cost announced by Rio Tinto on Monday was not enough, signalling it could ask for a rise above 100 per cent with its steelmaker customers.

Figures on Tuesday showed US consumer confidence fell to a 16-year low in June while inflation expectations held at their recent record high.

Inflation pressures will be high on the agenda at the two-day interest rate-setting meeting of the Federal Reserve, which concludes on Wednesday. The Fed statement is likely to indicate increased concern about inflation, despite a slowdown in the US economy, while avoiding any signal that rate increases are imminent.

Rising inflation would compound the crisis of the US consumer, whose confidence has been decimated by the bursting of the housing bubble and the ensuing financial turmoil.

But US macroeconomic data have so far shown little evidence that higher commodity prices have been passed to consumers.

Andrew Liveris, Dow’s chief executive, said the decision to raise prices on the company’s products by up to 25 per cent – the biggest hike in company history – were aimed at offsetting a “staggering” increase in costs.

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California unemployment hits 6.8%

Posted by ecoshift on June 20, 2008

California unemployment hits 6.8% – Los Angeles Times
That’s 1.5 percentage points higher than last year, the state reports. The May rate is the fifth highest in the nation.
Marc Lifsher, Los Angeles Times Staff Writer
June 21, 2008

SACRAMENTO — California’s moribund construction and real estate industries helped push the state unemployment rate to 6.8% in May, its highest level in nearly five years.

The state Employment Development Department reported Friday that joblessness in May rose six-tenths of a percentage point from the previous month and was a dramatic 1.5 percentage points higher than in May 2007.

And the outlook is likely to get worse for California — at least for the rest of the year, experts said. Economic concerns, fueled by higher oil prices, also sent stocks lower Friday, with the Dow Jones industrial average falling 220.40 points to 11,842.69, the lowest level in three months.

“Although some forecasting groups continue to debate whether or not the economy is heading into a recession, these numbers should make it perfectly clear that the state is already in a recession,” Beacon Economics, a Los Angeles-based research firm, said in an analysis of the jobless data. “The only question now is, how long and how bad will it be?”

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The coming collapse of the middle class…

Posted by ecoshift on June 20, 2008

Here’s a very interesting video on the changes in the economic position of a family with 2 kids over the past 30 plus years. It’s about an hour long, but it’s worth it. A very effective presentation that shows clearly how financial conditions for the typical American family have significantly worsened in recent decades.

YouTube – The Coming Collapse of the Middle Class

Distinguished law scholar Elizabeth Warren teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America’s credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class. Series: “UC Berkeley Graduate Council Lectures”

Makes a good companion piece to a “This American Life” program: The Giant Pool of Money. The video above gives a good sense of where the giant pool of money discussed in the link below came from…

This American Life
The Giant Pool of Money

A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.

Listen now…


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A bit of perspective…

Posted by ecoshift on June 20, 2008

Let’s try to keep things in perspective here… we may need the oil but that’s no reason to damage the environment…

In The Know: How Can We Make The War In Iraq More Eco-Friendly?

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A peculiar deal for some of Iraq’s oil

Posted by ecoshift on June 19, 2008

Managing Globalization » Business Blog » International Herald Tribune » Blog Archive »
High Energy Thursday: A peculiar deal for some of Iraq’s oil
Posted by Daniel Altman in High energy

Imagine. At the precise moment when demand for oil was the highest in history, a recently democratized country with enormous reserves had the chance to sell extraction contracts to the highest bidder. This was a country that desperately needed the revenue to help rebuild its schools, power grid and water supply after a long internal conflict. So why did it hand out the contracts with no auction at all?

As Andrew Kramer writes, Iraq has handed out no-bid contracts to the same companies that used to profit from its oil before Saddam Hussein came to power.

Deals with Iraq are set to bring oil giants back – International Herald Tribune
Deals with Iraq are set to bring oil giants back
By Andrew E. Kramer
Published: June 19, 2008

BAGHDAD: Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

Sensitive to the appearance that they were profiting from the war and already under pressure because of record high oil prices, senior officials of two of the companies, speaking only on the condition that they not be identified, said they were helping Iraq rebuild its decrepit oil industry.

For an industry being frozen out of new ventures in the world’s dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.

While enriched by $140 per barrel oil, the oil majors are also struggling to replace their reserves as ever more of the world’s oil patch becomes off limits. Governments in countries like Bolivia and Venezuela are nationalizing their oil industries or seeking a larger share of the record profits for their national budgets. Russia and Kazakhstan have forced the major companies to renegotiate contracts.

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Venezuela sees no need to increase oil production

Posted by ecoshift on June 19, 2008

Venezuela says will not attend Saudi oil meet | Reuters.com
Venezuela says will not attend Saudi oil meet
Thu Jun 19, 2008 7:05am BST

MARACAIBO, Venezuela (Reuters) – Venezuela will not attend a meeting of oil consumers and producers this coming weekend and sees no need to up output, the country’s oil minister said on Wednesday.

The meeting on June 22, organised by top oil exporter Saudi Arabia, seeks ways of cooperating over crude prices that on Monday hit a record high near $140 a barrel.

Oil Minister Rafael Ramirez told reporters at an oil business event in the Venezuelan oil hub city of Maracaibo that there was also no need for OPEC to meet before a scheduled September gathering of the group’s members to discuss prices.

“We will take our decisions over output in the framework of OPEC,” Ramirez said. “We do not think it is necessary to increase production. The production that is being added now is aimed at building inventory.”

U.S. ally Saudi Arabia plans to increase output to 9.7 million barrels per day in July, more than 6 percent above May levels and its highest since 1981, news that has helped tame crude prices slightly in recent days.

But Venezuela, an anti-U.S. price hawk in OPEC and a major supplier to the United States, has no plans to increase its output and would only do so under an OPEC-wide agreement to change production levels, Ramirez said.

The problem of high prices for consumer nations is not due to oil production, Ramirez said. Venezuela and other OPEC members have repeatedly blamed speculation, geopolitical tensions and a weak dollar for driving up the market.

(Reporting by Manuel Hernandez, Writing by Saul Hudson; Editing by Michael Urquhart)

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Oil falls on report that China will lift subsidies

Posted by ecoshift on June 19, 2008

Interesting.  China’s access to US markets is measured, at least in part, in transportation costs.  Plus, China just gave alternatives a boost in fueling Chinese production.  Given the recent rumblings about Iran you can understand why they might be concerned about their dependence on foreign oil and willing to make sacrifices to encourage alternatives.  Undercuts any transportation cost advantages that might accrue to US domestic manufacturing in US markets as well.

Oil falls on reports that China will lift subsidies – Jun. 19, 2008
Crude prices shed nearly $3 amid reports that China will raise fuel prices.
By Ben Rooney, CNNMoney.com staff writer
June 19, 2008: 10:24 AM EDT

NEW YORK (CNNMoney.com) — Oil prices fell nearly $3 Thursday amid reports that the Chinese government is lifting subsidies on gasoline and diesel in a move that could curb demand from the country’s rapidly growing economy.

Light, sweet crude for July delivery was down $2.89 at $133.70 a barrel on the New York Mercantile Exchange.

“The news out of China sold the market off,” said Dan Flynn, a market analyst at Alaron Trading in Chicago.

Strong demand from China’s booming economy has helped support crude prices in recent years. But a change in the government’s policy of subsidizing gas and diesel prices could mean higher gas prices for Chinese consumers and undercut that demand.

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How about that Irish Referendum…

Posted by ecoshift on June 15, 2008

Bureaucracy: 0
Democracy: 1

Reminds me of that great Dana Fradon New Yorker cartoon:

realists vs idealists

When Irish noes are smiling after referendum on European Union’s Lisbon Treaty – Telegraph
By Christopher Booker
Last Updated: 12:01am BST 15/06/2008

Seven years ago, Europe’s leaders decided that, as the consummation of their great “project”, they would draw up a Constitution for Europe. After extending its powers for nearly 50 years, often by subterfuge and deception, the European Union could emerge in its true light on the world stage, as an all-powerful, supranational government.

Then came that shocking moment in 2005 when the constitution was thrown out by the voters of France and Holland. The EU’s leaders were stunned, and bemused as to what to do next.

Then, last summer, they came up with a breathtakingly bold plan. They would rearrange the contents of the constitution in a way that made it virtually incomprehensible, omit the provocative references to a constitution, and railroad it through their parliaments without risking any more referendums – except for the only country, Ireland, whose constitution made one unavoidable.

….

Then came that Irish referendum, the one detail that the EU’s political class had not been able to stitch up. At the last minute, a tiny portion of the peoples of Europe had, once again, been able to speak up, in a way denied to all the rest. Again the leaders were stunned – but this time they were ready.

In coming days we shall see the degrading spectacle of them wheeling out their long-prepared formula for ignoring the Irish verdict, and imposing their constitution-by-any-other-name regardless. The European project will be revealed for what it has been all along: a mighty system of state power, run by the political class with lofty contempt for the people it rules.

But at least we shall be able to remember that vote by the people of Ireland, as a last glorious gesture of Europe’s dying democracy, before it is blotted out by the subtlest and most audacious coup d’état in history.

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The Economist catches the Cluetrain…

Posted by ecoshift on June 14, 2008

Here’s interesting set of articles. You may not notice on a day-to-day basis, but one of the themes of this blog is that effective cooperation and collaboration are underrepresented in policy and culture in the US — not to mention Humboldt County.

Instead we place a great deal of emphasis on competition. We believe that everyone benefits from competition – winners and losers. Once we get out of grade school (okay, kindergarten) concepts such as sharing, cooperation and empathy get shorter and shorter shrift. In short: we, as a policy making body, believe that a society run by winners is a better, stronger more advanced society than a society run by losers.

So the acceptance of collaboratively developed open-source software into the heart of our capitalist business models by major wall street firms is notable. Even Microsoft is toying with the concept.

Now, The Economist, to it’s credit, actually seems to be extending the open-source concept from software to hardware with their recent article. It’s as if they actually get the concepts behind the 1999 Cluetrain Manifesto.

Here’s the millennial quote from the Cluetrain website:

“A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies.”

Open-source is an expression of that conversation. Here’s a few comments on it’s progress starting with The Economist’s article.

Remember open-source doesn’t eliminate competition, it just allows collaboration a role in the process:

Open-source hardware | Open sesame | Economist.com
Jun 5th 2008
From The Economist print edition

Consumer devices: Revealing the underlying technical details of electronic gadgets can have many benefits, for both users and manufacturers

THE idea of “open source” software is familiar to many computer users. Enthusiasts get together on the internet to create a new program, and as well as giving it away, they also make available its source code—the software’s underlying blueprint. This allows other people to make additions and improvements, and those are made available, in turn, to anyone who is interested. You do not have to be a programmer to benefit from the open-source model: many people use the Linux operating system or Firefox web-browser, for example, both of which have been developed in this way.Now the same approach is being applied to hardware, albeit in a modified form. The open-source model cannot be directly carried over to hardware, because software can be duplicated and distributed at almost no cost, whereas physical objects cannot. Modifying source code and then distributing a new, improved version of a program is much easier than improving and sharing the design of, say, an open-source motorbike. Some day, perhaps, fabricating machines will be able to transform digital specifications (software) into physical objects (hardware), which will no doubt lead to a vibrant trade in specifications, some of which will be paid for, and some of which will be open-source.

Wall Street Embraces Linux – Forbes.com
Wall Street Embraces Linux
Lisa DiCarlo, 03.27.02, 10:50 AM ET

NEW YORK – Rick Carey has staked his reputation and his job on a project that he concedes is risky–but with potentially huge returns. He is the person in charge of a top-down implementation of Linux software at Merrill Lynch.Merrill is one of many Wall Street brokerages doing a large-scale Linux deployment in an effort to cut their costs and boost revenue. Indeed, these banks have had a very tough year: Merrill’s sales declined more than 10%, to $38.7 billion last year, and profits dried up to 56 cents per share, from $4.06 in 2000. The company laid off 9,000 employees last year to reduce compensation expenses.Merrill and others talked about their Linux plans at an event hosted by Red Hat Software in New York Tuesday night. Red Hat is a leading Linux distributor but is experiencing no shortage of pain itself. Sales for fiscal 2002 ended Feb. 28 fell to $86.8 million, from $103 million. Analysts polled by First Call/Thomson Financial are expecting the company to break even in the May and August quarters.Merrill’s plans, and others like it, are very significant because they are the first companywide–rather than departmental–Linux implementations. While not without risk, this lends an enormous amount of credence to the argument that Linux can be used in place of more established technologies like Unix.Second, it also shows that Linux does in fact threaten Unix. Sun Microsystems, the leading Unix provider, has only recently communicated what can be construed as a semi-comprehensive Linux strategy–perhaps prodded by customers like Merrill.”We are telling all of our vendors that they need to have some kind of Linux strategy,” says Carey, chief technology architect at Merrill. “We are hearing that consistently from everyone on Wall Street.”

PC World – Business Center: Microsoft Releases First Open XML SDK
Matthew Broersma, Techworld.com
Friday, June 13, 2008 8:30 AM PDT

Microsoft has released the first finished version of the software development kit (SDK) for the Open XML Format, the default storage format for Microsoft Office 2007 and the basis for a standard that is currently awaiting publication by the International Organisation for Standardisation (ISO).Open XML SDK 1.0 , available from the company’s website, is designed to allow developers to produce code enabling their applications to create, access and manipulate Open XML documents, Microsoft said.At the same time, Microsoft said last month that it will begin supporting the rival Open Document Format (ODF) in Office 2007 and Office 14, beginning with a service pack set for release in the first half of 2009.

And, while your thinking about what the implication of all this are for Humboldt County economic development and business competitiveness don’t forget to download the 3.0 version of the open-source browser Firefox on Tuesday…

Download Firefox 3.0 / Tuesday June 17th

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