Pouring Gasoline on the Fire

Big Banks Don't Want California's IOUs. The public is already none too happy with both the financial system and the various governments. As banks who have been bailed out of public expense now refuse to help the government (or more to the point, the citizens whose public debt supported by taxes is financing the bailouts), expect the social mood, which is already bleak, to darken further. It's getting very hard to see how this will not all end badly.

A personal anecdote: I saw a guy asking for money yesterday with a sign that said "recently forced into unemployment". Looks aren't everything, but this guy had the look of somebody who has, up until very recently, been adequately educated and continually employed. Clean cut, decent clothing, etc. He was definitely not a member of the perpetual underclass that our society has created.

When these kinds of people find themselves on the street begging for change, things are getting bad indeed.

The Times We Live In

"The Great Recession" no longer is an adequate description. "The Greater Depression", anyone?

Drawing alarming parallels with the past is Ambrose Evans-Pritchard, writing The unemployment timebomb is quietly ticking.

Even the Amish Are Not Immune

A Bank Run Teaches the 'Plain People' About the Risks of Modernity

In Amish country, a bank run is about as familiar as a Hummer or a flat-screen TV. For decades, the more than 200,000 Amish in the U.S. have largely lived apart from the mainstream, emphasizing humility, simplicity and thrift. Known as "the plain people," they travel by horse-drawn buggy, wear homemade clothing and live with very little electricity.

. . .

Over the winter, rumors began to circulate that the trust was running out of money. The run, as Mr. Bontrager describes it, began in April. It lasted about six weeks. Mr. Bontrager says about 100 depositors made significant withdrawals, and some emptied their accounts. The $1 million reserve fund was wiped out. The trust hasn't yet resumed lending.

They might have done better if they had adhered to their traditional values better.

FDIC Thursday

This has become so common as to barely be worth considering as news, but the tally for this Friday is three:
John Warner Bank Seized; 46th Failure This Year
Winchester bank fails, regulators turn it over to First National Bank of Beardstown
Illinois' Rock River Bank year's 48th bank failure

A bad day for Illinois.

Perils of Unemployment

Since the Depression, one vital piece of the social safety net has been unemployment insurance. Now, that piece of the safety net is getting shredded. It may not be too long before the financial disaster that is becoming unemployed is not mitigated at all by help from the government. If you currently rely on a job to pay the bills, now is the time to be making contingency plans in case unemployment insurance and your job both go away.

Eating Locally Year Round

I'm glad to see articles like this one: Learn how to can foods

If you garden for food or shop in bulk at farmers markets, you can enjoy the bounty all year long by canning fruit, vegetables, seafood and meat.

Learn how through "Preserving the Harvest," a series of summer workshops through the Washington State University Snohomish County Extension, now accepting registrations.

I would obtain equipment for food preservation (including canning equipment) now, while the economy is somewhat intact and such things can be still relatively easily found. Acquiring a canner after economic collapse has occurred and after it has become blindingly obvious to everyone why one would be needed is going to be extremely difficult.

The Forgotten News

Almost nobody is paying attention to it at the moment, but the swine flu is still making the rounds, and the growth rate in new cases has not noticeably gone down. For instance, these headlines:
Londoners Suffer Summer of Swine Flu as Cases Mount
Three deaths, 260 new cases reported in New Jersey
And it hasn't even gotten going in China, which only reporting 915 cases thus far. That's enough to be fairly certain it will spread through the population at large, but not enough for anybody to be worried ... yet.

And of course, the wildcard in all this is what happens if the current H1N1 virus recombines with another virus to become more lethal. Autumn and winter will be interesting, in the way of the old Chinese curse.

What Recovery?

Free Exchange is tracking the jobless recovery. The post concludes:

These are not comforting data points. If the recovery continues to be jobless, it may cease to be recovery.

I have a better explanation for persistent job losses in the face of the much-touted recovery (aka "green shoots"): namely, that there has been no recovery, jobless or otherwise.

Happy Holidays

From Marketwatch, via Solarbird: Latest Schultz Shock: a 'bank holiday'

In its current issue, HSL reports rumors that "Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen ... within 180 days, but could be 120-150 days."

Yes, yes, it's paranoid. But paranoids have enemies -- and the Crash of 2008 really did happen.

HSL's suspicion: "Another FDR-style 'bank holiday' of indefinite length, perhaps soon, to let the insiders sort out the bank mess, which (despite their rosy propaganda campaign) is getting more out of their control every day. Insiders want to impose new bank rules. Widespread nationalization could result, already underway. It could also lead to a formal U.S. dollar devaluation, as FDR did by revaluing gold (and then confiscating it)."

Who Collapses First?

The financial crisis du jour in the United States is California declaring a "fiscal emergency", but over on the other side of the pond we have this from Reuters: Sterling Crisis Looms as U.K. Unraveling Points to Budget Cuts

The state of the U.K. economy fills British financial historian Niall Ferguson with foreboding.

“The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,” the Harvard University professor says.

Ferguson’s concern stems from the deterioration in the U.K.’s public finances, which prompted Standard & Poor’s to warn on May 21 that the country could lose its AAA debt rating.

So, whose debt will default first?

Reality is Messy

The Long Emergency will not generally feature clear-cut narratives or instantaneous shifts in perspective. Instead, we will get much confusion and chaos, as this article from The Economist discussing climate-change induced migration describes.

Charles Ehrhart of CARE thinks UNHCR will remain central, but wonders how it or anybody can now distinguish between “forced” and “voluntary” migration. He says climate change may cut agricultural output by half in lowland Africa by 2020. “In such a context, does migration constitute a choice or a necessity?”

Migrants’ rights may be easy to assert for islanders whose homes are drowned—but hard in the case of big, messy movements across Africa and Asia. Most of the displaced will drift to the next-most-liveable place, as the poor do anyway.

“Many states are already overwhelmed by internally displaced populations,” says Mr Ehrhart. “Will they be able to support even more people on the move? If not, whose duty is it to make up the difference?”. At the least, the gap between carbon usage and climate change’s effects portends angry North-South rows.

Still Collapsing

From Kevin Drum, the Chart of the Day:

It's this simple: as long as the line is below zero, house prices are dropping. And if price declines slow down at about the same rate they accelerated, it means we won't get back to zero until sometime in 2011.

So much for green shoots. (Hat tip: Free Exchange)

Past the Tipping Point

Via The Oil Drum, this: The least sea ice in 800 years.

New research, which reconstructs the extent of ice in the sea between Greenland and Svalbard from the 13th century to the present indicates that there has never been so little sea ice as there is now. The research results from the Niels Bohr Institute, among others, are published in the scientific journal, Climate Dynamics.

I am becoming more and more convinced that we are past the tipping point with climate change, and that even were the human race responds perfectly to climate concerns from now on, we would still end up with radical changes in world climate. Between this fact and my pessimistic view of human nature, I find myself unable to get very excited about things that 15 years ago I would have been strongly supporting, such as the Waxman-Markey bill, or the imminent expansion of nuclear energy. At this point, it is simply too little, too late.

Boeing Takes Another Hit

Boeing's nightmare: Qantas dumps Dreamliners

Qantas has cancelled orders for 15 Boeing 787-9 aircraft (Dreamliner) in a move that will reduce the airline's spending by about $US2.5 billion ($3.7 billion) over the next few years.

Airlines are the dead men walking of industrial civilization facing peak oil. We'll be seeing many more headlines like this in the coming months and years.