Denial springs eternal

[Finster]

Re: Denial springs eternal

Depends on what the actual objective really was.

Iraq notwithstanding, the USA has arguably played the single most important role in bringing some semblance of peace and stability to the world in the last 100 odd years. The opening of its market and "globalization" [meaning the linking of economies together in a mutual dependence] would appear to have been a large contributor to that end.

Having observed up-close the growing nationalism and growing anti-Americanism in just one region that was formerly allied to US objectives, I truly wonder what that portends for global stability and peace over the next 100 years.

Good point! Guess I was referring to how it's been advertised to the American public ... create jobs, boost exports, improve American living standards ... that kind of stuff. To the extent the objective has been to create a sort of Pax Americana, a "New World Order", a benevolent American Empire, guess you say it has enjoyed a measure of success.

Yet you seem to have reservations about even that. Is it sustainable? Have the benefits exceeded the costs? If American wealth has been depleted to the extent that it cannot continue to succeed, then the benefit will have been transient while the cost permanent. And if American global hegemony has engendered more international resentment than gratitude and appreciation, the benefit runs out all the sooner.

What troubles me about globalization is not globalization per se, but the sense that it's been forced. That's what I meant by "aggressive" globalization. Exactly who is doing the forcing is not perfectly clear, but it seems we've been moving in the direction of a corpocracy in which power is being transferred to a transnational elite. In a manner reminiscent of the Soviet-era Party, US voters are effectively handed a slate of candidates pre-approved by this power structure. The perception of democratic voter control is maintained while campaign and lobbying funds become the primary drivers of the agenda. Those funds, in turn, are derived from the "inflate and trade" machine cited at the top of this thread.

[GRG55]

Re: Denial springs eternal

It wasn't intended to be a commentary on NAFTA per se, but I'm gonna have to go along with Zoog on this one. Anything that requires thousands of pages to define "free trade" can't really be very free. In general, a forcible intervention in the marketplace - all the more so one that requires an army of lawyers and bureaucrats to interpret and implement - is a lose-lose proposition for the market participants at least on a net basis. If, for example, you and I were to engage in a free exchange, we do so because each of us believes he will benefit. An external interference or forcible modification therefore can only hobble our ability to achieve what we ourselves deem in our own best interests.

This of course is not to claim that the net result is symmetric. My observation is with respect to the US, and since the direction of the US economy has been down and presumably the interest of the US government is the welfare of the US, it is more than an open question whether its aggressive globalization policy is playing its advertised role.

Depends on what the actual objective really was.

Iraq notwithstanding, the USA has arguably played the single most important role in bringing some semblance of peace and stability to the world in the last 100 odd years. The opening of its market and "globalization" [meaning the linking of economies together in a mutual dependence] would appear to have been a large contributor to that end.

Having observed up-close the growing nationalism and growing anti-Americanism in just one region that was formerly allied to US objectives, I truly wonder what that portends for global stability and peace over the next 100 years.

[Finster]

Re: Denial springs eternal

I find it interesting that the widespread opinion about NAFTA in Mexico is that it benefits the USA a great deal more. That opinion is not as widespread in Canada, but I sense it is growing, especially now that the Big 3 owed auto plants are shutting down one by one north of the border.

Your comment above implies that some in the USA [perhaps many?] also think NAFTA is a losing proposition for the US? Now how can that agreement really be a lose-lose-lose between the three parties to it?

It wasn't intended to be a commentary on NAFTA per se, but I'm gonna have to go along with Zoog on this one. Anything that requires thousands of pages to define "free trade" can't really be very free. In general, a forcible intervention in the marketplace - all the more so one that requires an army of lawyers and bureaucrats to interpret and implement - is a lose-lose proposition for the market participants at least on a net basis. If, for example, you and I were to engage in a free exchange, we do so because each of us believes he will benefit. An external interference or forcible modification therefore can only hobble our ability to achieve what we ourselves deem in our own best interests.

This of course is not to claim that the net result is symmetric. My observation is with respect to the US, and since the direction of the US economy has been down and presumably the interest of the US government is the welfare of the US, it is more than an open question whether its aggressive globalization policy is playing its advertised role.

[GRG55]

Re: Denial springs eternal

studies in behavioral economics have shown that the [negative] marginal utility of a loss is about twice the utility of a gain of equal objective magnitude. i.e. the pain of a loss is much greater than the pleasure produced by an equal gain. so the polls, toting up the perceptions or feelings of the populace, do not calculate the balance sheet in an objective fashion.

Apparently our Finster is one of those feeling that pain...

...We've been hearing this drumbeat out of Wall and Washington at least since NAFTA, and what do we have to show for it? We're now being told we have to tighten our belts, while our trading partners are doing famously well...

[jk]

Re: Denial springs eternal

Now how can that agreement really be a lose-lose-lose between the three parties to it?

studies in behavioral economics have shown that the [negative] marginal utility of a loss is about twice the utility of a gain of equal objective magnitude. i.e. the pain of a loss is much greater than the pleasure produced by an equal gain. so the polls, toting up the perceptions or feelings of the populace, do not calculate the balance sheet in an objective fashion.

[zoog]

Re: Denial springs eternal

I find it interesting that the widespread opinion about NAFTA in Mexico is that it benefits the USA a great deal more. That opinion is not as widespread in Canada, but I sense it is growing, especially now that the Big 3 owed auto plants are shutting down one by one north of the border.

Your comment above implies that some in the USA [perhaps many?] also think NAFTA is a losing proposition for the US? Now how can that agreement really be a lose-lose-lose between the three parties to it?

Because it was thought up by politicians.:rolleyes:

I think there are mixed feelings all around. From wikipedia:

Public opinion toward NAFTA in Mexico, Canada and the United States is mixed. A July 2004 survey conducted by CIDE and COMEXI in Mexico showed that 64 percent of the Mexican public favored NAFTA. The Program on International Policy Attitudes reported in a January 2004 poll that 47 percent of Americans thought that NAFTA has been good for the United States, while 39 percent thought it had been bad for the country. A recent Rasmussen report, however, shows that only 16% of likely Democratic voters in the 2008 presidential election support NAFTA, while 53% disapprove of the trade agreement.

A Canadian poll conducted in June 2003 by Ipsos Reid found that 70 percent of Canadians supported NAFTA, while only 26 percent were opposed. However, a May 2004 Ipsos poll found that "Six in ten Canadians (62 percent) disagree that Canada should sign a trade agreement that would open Canada’s public services to competition from foreign companies" and "A further six in ten (60 percent) disagree that government should sign deals that would allow corporations to directly sue the Government of Canada if our public policies impair their ability to make profits".

Despite their support for NAFTA, the polls in Canada and Mexico have tended to show that citizens see their own country as the loser in NAFTA, and to see the United States as the winner. The U.S. public has viewed Mexico as the winner and has been narrowly divided about whether the United States is a winner or loser in NAFTA.

[GRG55]

Re: Denial springs eternal

The question is: Without an expanding credit supply, can they afford to raise prices?

This credit contraction will give DOW and its customers a beating... I wonder how many of its customers will close down?

The problem DOW Chemical has is not that usage of its products is going cease, but that too many of its products are still fungible commodity chemicals, and DOW is no longer the low cost global producer.

"...Sinopec says it is in discussions with Sabic that may Lead to Sabic joining an ethylene project at Tianjin, China that was originally conceived as a joint venture between Sinopec and Dow Chemical. Dow pulled out of the discussions a couple of years ago..."

Where they compete head-to-head with companies like SABIC or Aramco they are dead, unless they can sell those businesses to their lower cost competitor (e.g. GE Plastics), close them out, or persuade their competitors to JV if able to bring something unique by way of production technologies, marketing capabilities, etc. to the table.

Aramco confirms 'mammoth' Dow deal

by Reuters on Sunday, 13 May 2007
Saudi Aramco and U.S. Dow Chemical Co. announced on Saturday a deal to build a petrochemical plant that industry insiders expect to be the largest foreign investment in Saudi Arabia's energy sector.

The cost of the Ras Tanura plastics and chemicals complex would be "mammoth", said Saudi Aramco's President Abdallah Jumah, although he declined to give details.

Earlier this week, industry sources said the plant would have an investment cost of at least $20 billion. Costs have risen with soaring inflation in the energy industry from an Aramco estimate last year of around $15 billion...

...The world's largest oil exporter Aramco chose Dow last July to discuss the plant, which Aramco will supply from the nearby 550,000 barrels per day Ras Tanura oil refinery and Ju'aymah gas processing plant...
http://www.arabianbusiness.com/12536...mmoth-dow-deal

Edit added: Ref. the last paragraph above, although Saudi Aramco will be exporting less first order petroleum as a result of diversion for feedstock for projects such as this, we should remember that, to the degree they are exporting any higher order product made from such feedstock, they are still exporting the "contained energy" to the rest of the world.

[GRG55]

Re: Denial springs eternal

Oh boy. :rolleyes:

We've been hearing this drumbeat out of Wall and Washington at least since NAFTA, and what do we have to show for it? We're now being told we have to tighten our belts, while our trading partners are doing famously well. Fewer Americans can afford to own and drive cars, while more and more Chinese can.

What's that definition of insanity? When you keep trying the same thing over and over thinking you will get a different result?

I find it interesting that the widespread opinion about NAFTA in Mexico is that it benefits the USA a great deal more. That opinion is not as widespread in Canada, but I sense it is growing, especially now that the Big 3 owed auto plants are shutting down one by one north of the border.

Your comment above implies that some in the USA [perhaps many?] also think NAFTA is a losing proposition for the US? Now how can that agreement really be a lose-lose-lose between the three parties to it?

[Finster]

Re: Denial springs eternal

Denial springs eternal

Can the US inflate and trade its way back to economic health?

US Trade Representative Susan C. Schwab on Charlie Rose recently explained how free trade and a weak dollar benefits Americans....

Oh boy. :rolleyes:

We've been hearing this drumbeat out of Wall and Washington at least since NAFTA, and what do we have to show for it? We're now being told we have to tighten our belts, while our trading partners are doing famously well. Fewer Americans can afford to own and drive cars, while more and more Chinese can.

What's that definition of insanity? When you keep trying the same thing over and over thinking you will get a different result?

[Sapiens]

Re: Denial springs eternal

The question is: Without an expanding credit supply, can they afford to raise prices?

This credit contraction will give DOW and its customers a beating... I wonder how many of its customers will close down?

[metalman]

Re: Denial springs eternal

The unprecedented aspect of Dow's increase is that it was unforeseen and virtually immediate, not necessarily the absolute number, right? Given their use of crude, 42% in the first quarter seems about right. This is an oil story first, turning into an inflation story down the road.

The above analysis wants us to see the increase in crude as part of the weak dollar policy, more than from peak cheap oil. However, the Dow case looks to be more about demand for energy/oil than supply of currency.

I guess what I'm saying is that there are two potential causal stories here, both with merit, but which should likely be distinguished and analyzed individually.

finster says it's all money supply. respect that.

ej says it's both oil supply/demand and money supply/demand... he's been saying that for years on end.

take your pick.

obviously there is less oil vs all the nations going after it. yeh, capitalism! they got cars in shithole countries now.

obviously the usa has lost its monopoly on currency and the war has screwed up its relationship with suppliers.

obviously, it's both oil and money. so the rational argument is over...

how much of each is contributing but even more important...

WHAT THE HECK ARE WE GOING TO DO ABOUT IT???

a) i cannot control oil supply.

b) i cannot control oil demand, except my own.

c) i cannot control dollar supply.

d) i cannot control dollar demand.

all i can do is try to see where a, b, c, d are going and hedge/invest accordingly.

see bonds shit the bed today?

U.S. data, price worry trigger global bond rout

By Natsuko Waki
Reuters
Thursday, May 29, 2008; 4:41 AM

LONDON (Reuters) - Investors dumped safe-haven bonds in major economies on Thursday, pushing euro zone government borrowing costs to a nine-month high following upbeat U.S. economic data and inflation concerns from costly oil.

World stocks hit this week's high and the dollar rose broadly after Wednesday's data showed a jump in new orders for long-lasting U.S manufacturing goods outside of transportation, suggesting surprising strength in the factory sector. A gauge of business investment also posted a surprise rise.

The data, which followed easing concerns about the credit crisis nine months after its initial outbreak, triggered a sell-off in U.S. Treasuries and Japanese government bonds. Euro zone government bonds, already under heavy pressure from data showing a pick-up in German inflation, followed suit.

---

what'd gold/silver do? splat!



silver? splat! usual pattern...



platinum, the pure industrial... splud! (like splat but softer)



hedgies don't tie platinum into the bond/oil trade... so we see.

bonds down, pms down... c'mon folks, put the thinking caps on. what's with that?

why are fixed income investors scared out of bonds AND hard assets at once? should not pms rise when bonds sell off?

no! the inflation risk is 2nd order... via central bank funding cause/effect.

what i'm saying is that the hedgies have this HUGE trade in the collapse of usa treasuries that shows up as a pm sell-off when bonds tank.

but what do i know?

Re: Denial springs eternal

I guess what I'm saying is that there are two potential causal stories here, both with merit, but which should likely be distinguished and analyzed individually.

I don't see that happening.

[jtabeb]

Re: Denial springs eternal

The world's finest high end audio equipment used to be manufactured primarily in denmark (scan-speak, Dynaudio, Plitron, etc)

They are ALL now manufactured in china. (we are talking speaker drivers and transformers, but they are also going into finished products as well). The chinese have a whole high-end audio buisness springing up that not only competes on Quality with anything made anywhere in the world, but ALSO on PRICE. And because IP enforcement is weak, you can get "copies" of items that are exact (made in the same plant) without the brand added costs.

[cmraynew]

Re: Denial springs eternal

The unprecedented aspect of Dow's increase is that it was unforeseen and virtually immediate, not necessarily the absolute number, right? Given their use of crude, 42% in the first quarter seems about right. This is an oil story first, turning into an inflation story down the road.

The above analysis wants us to see the increase in crude as part of the weak dollar policy, more than from peak cheap oil. However, the Dow case looks to be more about demand for energy/oil than supply of currency.

I guess what I'm saying is that there are two potential causal stories here, both with merit, but which should likely be distinguished and analyzed individually.

[c1ue]

Re: Denial springs eternal

Yes, amazing how high oil prices affect shipping costs. Although if China continues to subsidize oil prices - this too can become a competitive advantage: just fuel the ship in China. Not an option if you're a truck driver.