Commercial Real Estate - a Blackhole

SUBHEAD: The next shoe to drop in the collapse of US economy is the Commercial Real Estate market, scheduled for early 2010.

Interview with Jeff Neal on 20 November 2009 on Huffington Post -
(http://www.huffingtonpost.com/2009/11/20/zombie-buildings-are-they_n_365400.html)


 
 Image above: Still from video (below) of Jeff Neal interview with Huffington Post.

Industry experts report that resets on thousands of jumbo commercial loans across America are expected to start falling into default in January 2010. D.C.-area developer Jeff Neal gives the Huffington Post Investigative Fund a tour of empty commercial properties just blocks from the Capitol.

Hundreds of small and medium-size banks are facing huge numbers of possible defaults by builders who erected thousands of office towers, condominiums and shopping centers with the easy credit available five years ago.

   
Video above: Interview with Jeff Neal on YouTube From http://www.youtube.com/watch?v=Q4TqcnID77c
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Black Friday & the Walking Dead

SUBHEAD: “Consumers” gutted by 30% interest rates and staggering debt, are becoming zombie shoppers this year. Image above: Boston Zomboe Walk 2009 in the Prudential Center. From http://colliny2k.gamerdna.com/game_post/dELijYC/boston-zombie-walk-2009-oct-17th By John Schettler on 25 November 2009 The Writing Shop - (http://www.writingshop.ws/html/zombies.html) So here we are, another year older, another turkey gone to the gut, but that warm satisfied feeling we usually associate with the day after Thanksgiving may have a hollow quality to it this year. They call it “Black Friday,” because the retailers wait all year for this day to push their profit/loss ledger into the black. From here on out they make most of their annual profits, or so we are told. But this year it was just a little harder to get those “doorbusters” specials going. It was a little harder to convince us with those “Save Big!” signs aimed at prying open our wallets. We finally figured out that you save by not spending, no matter what the price is. Analysts predict the average person will spend much less this year, and if that were true it would portend the worst retail Christmas in decades, down from last year’s worst Christmas in decades. The consumer of 2009 is a chastened, leaner animal this year, hungry, to be sure, but without the means of hitting the malls in force. We may see the usual crowds this year at the malls...and a lot a sight seeing and window shopping. Just 24 months ago, in those halcyon days of 2007 we had pundits claiming: “The consumer is programmed to buy right now. They see bargains like they’ve never seen before!” Sigh…Programmed to buy? All the talk about deep discounts pumped out by the media was undoubtedly part of that programming. Realize, of course, that the media exists primarily to keep the cash registers ringing in our nation’s stores. This is its primary reason for being. One woman reportedly made a statement, according to Bloomberg: “My children would not be able to get half of what I’m getting them without Black Friday,” so the customers come out expecting the bargains, and the retailers cut cards with the devil and forsake profit just so they can recover the money already spent to buy the inventory. This year there is even a new website tracking all the sales and “doorbuster” specials so you can zero in on your item of delight. http://bfads.net/ Well, the programming is still intact, but the gift lists will undoubtedly be shorter. The consumer may be out in force again this year, but so many have been gutted by this recession that they will be walking zombies. Home equity is gone, credit cards are maxed out, card limits have been drastically cut, interest rates are at an all time high. It remains to be seen if the spending this year is the typical gadget rush or if the dollars end up being spent for more practical things. Reports are that flat screen TVs and BlueRay disk players are hot items. Americans love their TV and movies, now in 1080p high definition. You can see every wrinkle behind the newscaster’s makeup at that resolution! Years ago I urged buyers to start thinking “need” instead of “want.” As the season of frivolous shopping finally begins in earnest, we’ll see if ‘consumers’ roll out all that money they sat on throughout the year r when retail sales went off a cliff with the banks, stocks, and investment portfolios. The Spartan sales could have just been penny pinching for Christmas. Americans love to spend, and it may again look like a bona fide Black Friday as the zombies trample and claw their way through the doors of our Big Box dream stores again this year. Call it capitulation buying, if you will. Those that still have jobs will stock up now while the going is still good, and while their dollar still holds value. Assessing the damage done thus far to the economy, Ambrose Evans-Pritchard quoted a banking insider for the UK Telegraph: “This gamble (by the world banks) was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold. ‘They are throwing the kitchen sink at this,’ said Tom Fitzpatrick, the bank's chief technical strategist. ‘The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock. Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop.” That’s pretty dire stuff coming out of an insider banker’s mouth, eh? Yes, the world is not going back to normal after the magnitude of what they have done, and Mr. Fitzgerald can count himself in the group he calls “they.” We have had a good life in this country, perhaps the highest standard of living for the average person that the human race has ever known. Most people alive today were born at the outset of, or sometime within, the upward leg of the great petroleum curve, where energy was cheap and plentiful. If you’re reading this now, I’m willing to bet that things are probably not all that bad in your life. You have a computer, and it’s probably inside a home, and the house has heat, electricity, phone and cable service, fresh water and reasonable sanitation. You’ve got a host of appliances, and food in the fridge. You probably have a car parked outside. You probably still have a job, which means income, so be thankful for that. Count your blessings! Half of humanity has no access to electricity, and a huge percentage don’t have a home either. Hundreds of millions will struggle with hunger, even in this country, where 40 million have a problem putting food on the table each month. Only about one in ten in the world will have their own personal computer, to browse the Internet. Africa is regularly plagued by mass migrations of humanity, as people are forced to flee from violence, famine or disease. Let’s face it, we’ve had it made in the proverbial shade here in the good old US of A, but the easy life will be one reason why harder times will be more difficult for us to imagine and weather. Even the Europeans have memories of a time when their whole continent was reduced to piles of smoking rubble during WWII. We have never endured anything like that. The toughest period in our modern history would be the Great Depression, and now a lot of analysts are saying that we’re about to have the sequel. Time Magazine is not betting on a rosy Christmas shopping season. “‘By the end of 2009, the number of retail players will be down by at least 25% and could be down by as much as 40%,’ says Britt Beemer, chairman of America's Research Group.” So let’s call it “Grey Friday,” this year and let’s remember it as one of the last reflexive expressions of the old consumer culture we’ve been living in the last 50 years, an echo, a shadow of a life we may not see again for years, if ever. Looking Back at Black Friday 2009 A year from today we may not believe the circumstances we find ourselves in. We’ll look back at this day, when we sat at our Thanksgiving table with the rumble of failing banks and the roar of government liquidity cash bailouts in the background, and we’ll say to ourselves: ‘We had it good back then. Food was getting more costly, but it was still plentiful. Gas prices were the lowest we had seen all year, and we could still drive most anytime we wanted to. The electricity stayed on all the time, and we almost never had power outages. The airlines were working and we were still ‘free to move about the country.’ A few retail chains were falling into bankruptcy, but the worsening economic climate made for some real good deals in the malls. Hey, remember the big malls? Remember how they would hang those massive Christmas decorations, roll out the sale signs, offer to gift wrap our gadget haul in the kiosks on the promenade? Remember how we would buy jewelry, perfume, iPods, cameras, and those big flat screen TVs? Hey…remember credit cards? Remember how we could just swipe the plastic and haul off anything we wanted, whenever we wanted? Man, we had it good back then. We could see things starting to slip and fall, but the layoffs were only just starting in November of ‘08. They would get so much worse in 2009. And that year, bemused by the illusion of an imminent “recovery” the zombies hit the malls one last time. Yes, it was the last year when America served up the dream at 40% to 70% off. We had it good…’ Meanwhile, housing prices are still plummeting, foreclosures are still rising and a massive wave of commercial loan defaults and Option ARM resets is foaming up just off shore. Banks are still teetering on the brink, technically insolvent but kept open by accounting rules changes and taxpayer money. Unemployment persists in double digit pain. Thirty million Americans are already on food stamps, (1 in 10), and food banks are complaining about growing stress on their already meager inventories. But things are still holding together in some semblance of the life we have known for decades. The crash is already underway, like a slow motion avalanche, yet most people fail to really understand it, much less face it or plan how to deal with it. Banks Are Worse Than You Think The banks are in trouble, worse than the media will let on, but they are still open. The shock of something like a “bank holiday” has not yet hit Americans in this generation. The word “holiday” was always associated with spending of one sort or another. When the banks have a holiday it means no spending at all! This entire crisis was self-made by the banks. Subprime lending was a nice scapegoat, and you’ll notice that the little guy out there will be the first punished by decapitated credit, high fees, usurious interest, no access to capital. It has always been so. Paulson and Bernanke poured trillions into the economy at the top, about $60,000 for each person in the US, $200,000 per average household, if distributed at the bottom. Brother, that would have insured a healthy Black Friday, Saturday, Sunday, Monday and probably Tuesday, Wednesday and Thursday as well! You think Chrysler and GM would be having trouble selling cars if each American household had received the bailout money instead of the banks? I suppose the idea of giving it to the multi-millionaires at the banks instead is that they know better what to do with it—sit on it, pay out bonuses and dividends for their staggering investment failures, stage half-million dollar meetings at resort spas, use it to buy up the wreckage of smaller institutions who didn’t get the cash, invest it in yet more derivative schemes betting on which assets will be recovered safely from other ‘troubled institutions.’ My, how the rich amuse themselves. The point of all these bailouts is supposedly to get the economy moving again, but all it is really doing is insuring the wealth and efficacy of the private banks and the elite that control them, an enormous concentration of power all to be paid for with public money. The government demands 40% of our income in taxes, then they give it to the private banks for free. The Banks then brand each of us with a FICO score and squint at loan applications trying to decide whether or not they’ll lend us back the free money we gave them. Some call this “free market capitalism.” I call it the fleecing of America. I guess the theory is that it will all eventually ‘trickle down’ to Average Joe. Don’t hold your breath waiting for it to arrive. If it ever does, the dollars poured on at the top will be worth far, far less when they reach the bottom, down on Main Street. You think these Wall Street Gurus didn’t know what they were doing with the securitized casino they created? They set up loan sharking boiler rooms in the thousands, cranked out millions of loans on badly overvalued homes, took out insurance against loss in a “credit default swap” that pays off bigtime if the ‘homeowner’ defaults, and therefore actually favors foreclosure. Susanne Trimbath, Chief Economist of STP Advisory Services, explains the scheme: “A conservative estimate is that $9 worth of CDS “insurance” has been sold for every $1 in mortgage bond. Therefore, someone stands to gain $9 if the homeowner defaults, but only $1 if they pay. The economic incentives favor foreclosure, not mortgage work-outs or Main Street bailouts.” That’s assuming the insurers can pay, and in this light the purpose of the bailout money is obvious. See why AIG keeps coming back to the Treasury Department for more and more cash? The money they pay out to settle these CDS deals is again going right into the pockets of the same broker/investor sharks who set up the whole scheme! It’s a nice little ‘Rich Dad’ game that is now playing with public money, and all this is happening right under the noses of a clueless Congress. Real Life Monopoly It’s like one of your rivals in a game of Parker Brothers ‘Monopoly’ is able to just reach out and take as much money from the bank as they desire! While you follow the rules and patiently wait to collect your $200 bucks as you pass Go, they reach in as scoop up thousands from the public trust. If someone lands on one of their properties, and can’t pay the rent, that poor player normally sells off any deeds he or she still holds and is out of the game. The property holder takes the loss in unpaid rent. But not in this game. This time the Rich Dad has a credit default swap and gets to make up for any unpaid rent by just taking it willy nilly from the bank...nine times! This is, in effect, what the bailouts are doing. It’s nothing less than criminal fraud, and the most amazing thing is how this Rich Dad player got everyone else in the game to agree to these rules, the Treasury, the Fed, the Congress and the People they’re all supposed to represent. Is it really that amazing? The Treasury and the Fed are all run by Rich Dads too. Writer Tom Eley reminds us of Balzac’s maxim that: “behind every great fortune lies a great crime.” It may yet prove a fitting epitaph for American capitalism. A recent survey by the Wall Street Journal reveals that CEOs at major US financial and real estate firms converted tens of millions of dollars of overvalued stock into cash prior to the eruption of the current financial crisis, even as many of their corporations approached the precipice.” Nothing like insider stock trades, eh? Well… this is the last Thanksgiving that will in any way resemble the old life here in America… Have some turkey, get out and buy something at 70% off and enjoy yourself. The years ahead will be leaner yet. See also: Ea O Ka Aina: Giving thanks for our harvest 11/25/09

Bottleneck

SUBHEAD: A book review of "Humanity's Impending Impasse", by William R. Catton, Jr.

By George Mobus on 24 November 2009 in The Oil Drum -
(http://www.theoildrum.com/node/5954)


Image above: The Kaaba at the center of Mecca in the Al-Haram Mosque draws millions. From http://infidelsarecool.com/2009/04/05/heartache-some-200-mosques-in-mecca-point-the-wrong-way 

 First I should confess to a strong bias toward the content of this book. As readers of my blog, Question Everything, will realize, I have been moving inexorably toward the same conclusion as the author, so you will perhaps forgive me if you think I may be suffering from a lack of sufficient critical thinking. Put bluntly, I think this is a book every thinking human being should read, and then consider for themselves. To a growing number of people it is looking more and more like mankind is about to undergo a most unpleasant transition. One might write such views off as being what kooks and apocalyptic religious fanatics hold to, and we know they are crazy.

But over the last five years many deep thinking and well respected people have been sounding some alarms that are not as easily put aside. In 2004 Martin Rees, the Astronomer Royal in Britain and clearly no intellectual harebrain, wrote "Our Final Hour: A Scientist's Warning", Basic Books. In it he gives humanity about a 50/50 chance of surviving through the century. Not really good chances when you think about it. Last year James Gustave Speth, dean of the Yale School of Forestry and Environmental Studies at Yale University, wrote a sobering call for a massive revision of capitalism and an end to growth in "The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability", Yale University Press.

Like many authors have done, he painted a picture of what was wrong and why, but then pointed to remedies that might presumably fix the problems. That is, if only our leaders and our citizens would see the light and do what is necessary we might avoid total collapse. Most of these authors offer humanity an escape hatch, but point out that we have to be willing to sacrifice substantially, in terms of material wealth, for it to work. The realization that mankind is damaging its planet is certainly not new. Rachel Carson (The Silent Spring, 1962) may have started the trend in increasing awareness that we are doing things, in our zeal to control nature, that were starting to backfire, threatening to leave us worse off if we didn't change our ways and attitudes. Environmentalism has largely operated on this theme for decades.

We've been warned of environmental degradation, global warming, and peak oil, and how these are interlinked. We've been made immanently aware of the dangers we have ourselves created. Now William R. Catton, Jr., Emeritus Professor of Sociology at my state's other PhD granting institution, Washington State University, brings on the sequel to his first book in this genre, "Overshoot: The Ecological Basis of Revolutionary Change", University of Illinois Press, in which he sounded an alarm being heard more frequently.

Like Speth, Catton, in that earlier book, pointed out the problems as he saw them, from the viewpoint of a sociologist, and then declared that if we heed these warnings we might yet escape the worst. In the sequel, "Bottleneck: Humanity's Impending Impasse", Xlibris Corporation, he drops the part about we can evade the worst. The subtitle says it all.

Now he concludes that it is already too late to mend our ways and somehow avoid the collapse of civilization. Indeed the main title refers to an impending collapse of the human population. An ecological bottleneck (also called an population bottleneck) is where radical changes in the environment of a species causes a die-off of all but the most hardy of the population; hardy, that is, in terms of the selection pressures arising from the change. Of course there may be no sufficiently hardy individuals left or the ones that manage to survive cannot reproduce sufficiently to produce a new population. In that case the species goes extinct.

 Catton's arguments for why this is the most likely outcome for humanity boil down to something I have written about in my blog for several years now. It is the rate of change that matters as much as the degree or magnitude of change when it comes to shocking a population. If we look at the rate of climate change due to anthropogenic forcing, or the rate at which our fossil fuel energy sources are depleting, or the rate of aquifer depletion, or the rate of population increase, or the rate of consumption increase per captia in the developed and developing worlds, or... You get the picture.

We are changing the world in ways unfavorable to human survivability more rapidly than we can either adapt or mitigate. And we have already passed the point of no return. As to why we are in this state of affairs, Catton calls on several sociological theories surrounding the evolution of culture and especially the development of over-specialization or 'division of labor'. The latter was touted by Adam Smith as the reason we were so efficient in our manufactures.

And Catton, like many authors who deplore modern capitalism and corporatism, recognizes that at a time this was indeed a beneficial capacity. Today, however, he says that we overdid it and that the tendency toward deep specialization has tended to dehumanize and isolate each of us from the benefit of interpersonal relations. He further argues that we have come to think of others as instruments, mere means to our own ends. This he says is the end result of taking the abstraction of money as representing wealth too far in our thinking.

This idea that once things like money and capitalism, etc. fulfilled good purposes and were good for society as a whole, but have simply been overdone in our modern technologically-driven world, is actually one of the common themes sounded by many writers. It is certainly something I have subscribed to in my evaluation of human affairs. Early in mankind's history, these inventions, these institutions, served a purpose to make man more fit as a species, to quell the negative selective forces of nature and allow humans to succeed evolutionarily. But somewhere along the line humans failed to recognize that too much of a good thing is actually bad.

The failure to recognize this is the lack of wisdom, to which I will return in a bit. But to understand how humans got so carried away it is important to recognize, as Catton and others have done, that humans, like all animals, have a biological dictate to maximize their access to energy. For humans this took the shape of learning to control fire, making clothing, building shelters, and later finding additional external energy sources to supplement their bodily abilities. This included the invention of tools and agriculture.

And it essentially culminated in the discovery of fossil fuels that allow modern humans incredible power over their environment. Catton renames a subset of Homo sapiens as a 'quasi-species', Homo colossus, those being the people in developed countries who consume massive amounts of fossil fuels to motivate and control machines that do orders of magnitude more work than a human can do with muscle power alone. To achieve this we are combusting carbon to produce CO2 and returning fossil carbon deposits to the atmosphere and oceans after sequestration for millions of years.

And it is the rapidity with which this is happening which leads Catton, and others, to conclude that it is infeasible to put the brakes on for this train. That is, you can try to brake, but you won't stop in time to avoid a crash. Unfortunately for mankind, there are now far too many of Homo colossus in the global population. And the damage is done. NASA climatologist James Hanson has claimed that the concentration of CO2 in the atmosphere should not be over 350 parts per million (ppm) in order to avoid calamitous climate shifts.

But we are already at 385ppm and climbing, even though the global recession has slowed the burning of fossil fuels. It just isn't enough to stop let alone reverse the growth in carbon in the air. But beyond the damage done already, and the potential damage to come due to climate changes and sea level rise, Catton sees an impending threat from the fact that we are going to run out of this magical fuel one day. Or at least we will hit a barrier where the cost of extraction exceeds the benefit of having the fuels. When that happens what becomes of Homo colossus?

Indeed what happens to Homo sapiens in toto? Even though peoples in developing and underdeveloped nations don't burn the fuels directly, they still rely on the developed world for aid produced by burning those fuels. Catton bases his analysis on the idea of carrying capacity. Fossil fuels have artificially boosted the carrying capacity of earth for human occupancy (if you ignore the damage we've done to other species). We are in overshoot, the theme of his previous book.

We are like the cartoon character, Wile Coyote, who would race off a cliff in futile pursuit of the Roadrunner and would remain suspended in mid air until he realized his predicament; then it was too late and he would fall. When the fossil fuels are effectively used up, what will replace them? As things stand now, there simply is no realistic or viable alternative energy source that could scale up to the level needed by modern civilization in time to take over the job.

Once again, it's the rate of change that gets us. In spite of continued pie-in-the-sky thinking by even engineers and scientist who should know better, no one has shown how real time solar energy in all of its many forms (thermal, photovoltaic, wind, even hydroelectric) will ever match the power in fossil fuels. These came from ancient photosynthesis over millions of years compressed and cooked into a convenient package over more millions of years.

The scope of concentration is literally unimaginable (apparently) yet very serious people dream of capturing current solar influx and replacing fossil fuels with it. They may be serious but they are also dreamers or delusional. While in theory, the total daily influx of solar energy to the earth would provide many times over what we need to sustain our current civilization and provide development for the lesser developed nations, our systems of capture would have to cover gigantic areas of the planet.

Our energy storage and distribution systems would have to be radically redesigned and rebuilt. And all of this comes just as we recognize the impacts of declining net energy from fossil fuels; those fuels being needed to subsidize the building of all that energy infrastructure. The root cause of humanity's impending impasse, however, is not his lack of will, or cleverness, or even sufficient energy resources. The root cause is his lack of wisdom. Catton points to this on page 190, speaking about his great-grandson:
"...by the time surviving members of his generation have emerged from the coming bottleneck, when he may himself have somewhere a great-grandson he will wish to visit, somehow his contemporaries will have attained the wisdom (Emphasis mine) 
 Linneus implied was characteristic of our species when he named us Homo sapiens." For several years now I have been pursuing a quest to understand better why our species is not, on average, wiser than it is, apparently. With all of the history we have experienced, with all of the science we have learned, with all the cleverness our kind has for solving local (in time and space) problems, you would think that we would have developed greater wisdom than we have in fact. Why haven’t we been able to learn from our mistakes and develop a society that reflects individual and collective wisdom?

What I came to realize was that the brain capacity for wisdom (which I have boiled down to: good judgment in complex social issues, strategic thinking, highly developed systems thinking, and strong moral sentiment, coordinated by the most recently evolved patch of prefrontal cortex) was a relatively new emergent capacity coupled with symbolic thinking and language and second order consciousness (conscious of being conscious) for early Homo sapiens.

But it was evolved, as Catton notes, to meet the needs of the late Pleistocene existence of our small group-oriented species. It is not, on average, up to the task of modern complex society. One of my main conclusions is that our species is simply not sufficiently wise (or I prefer the term ‘sapient’ to differentiate between a native capacity and an actualized capability) to deal with the world we have created. For a more in-depth treatment of this subject, readers are directed to my working papers at: http://faculty.washington.edu/gmobus/Background/seriesIndex.html.

It is this lack of inherent wisdom that will keep us, has kept us, from doing the right things to prevent the impending impasse. Catton's 'Prognosis for Humanity', page 206, is alarming.  
"...with great reluctance and regret, I am compelled to doubt that we can confidently hope to avoid a serious 'crash' as the focal human experience of the 21st century—envisioned also as our species having to pass through an ecological "bottleneck". 
This is by far the most explicit statement of what we would call doom of any author in the popular book trade.

There have been many writers, especially in the blogosphere, who have expressed similar conclusions. But I have yet to see a writer of some eminence such as Catton go all out and claim that the end is near.

Unfortunately, I happen to agree with him. The question for me is: Will humanity come through this bottleneck with a gene pool competent to meet the challenges of a changed world AND have a stronger native capacity for sapience, for wisdom? Assuming some remnant of humanity does survive, that is no guarantee that our descendants will go on to evolve a better ability to make good, long-term judgments in that future world. Nor are we guaranteed that they will be able to reconstruct anything like modern technology-based society in order to re-achieve a species fitness allowing them to survive and thrive in the very long run.

My only complaint with Catton's thesis is that he didn't go far enough in suggesting what those of us who see this coming might do now to save our genus from extinction or, in the case of my concern, to increase the likelihood that our descendants will inherit genetic components leading to higher sapience. He assumes that some humans may survive and the future environment may select for greater wisdom. I'm not so sure that will be the case. His parting words simply express thankfulness that he lived during the epitome of human achievements in science and understanding as well as freedoms to travel the world. My question is:

Now what do we do? I have to applaud Catton for writing so honestly about what he has concluded. I have contemplated writing a book on the evolution of what I call eusapience, true sapience, as the future of the genus Homo – Homo eusapiens. Necessarily, the species sapiens must go extinct to allow the rise of a new, wiser, species of humans. And an evolutionary bottleneck would be the most likely mechanism for this to happen.

But I have hesitated, realizing this is a message no one wants to hear! Every other author of books on end-of-the-world scenarios at least offers that if we would only come to our senses... the world won't end. William Catton does not do this. Sorry for the spoiler but you should know in advance. Thus this probably isn't a book easily digested by everyone, even though I think everyone who believes themselves to be a critical thinker should read it.  

• The reviewer is an Associate Professor of Computing and Software Systems at the University of Washington Tacoma. He is currently on sabbatical leave studying biophysical economics and energy-related issues at the State University of New York, Environmental Sciences and Forestry in Syracuse NY. His blog is Question Everything at:http://questioneverything.typepad.com 

  See also:
Ea O Ka Aina: Ghost Slave's Carrying Capacity 9/8/09

Giving thanks for our harvest

SUBHEAD: Future Thanksgivings may soon be more like the first one. Not a time of gluttonous consumption, but a time to be grateful for a hard earned harvest. Image above: Starving, worn out Pilgrims reach Plymouth rock. From http://splencner.blogspot.com/2009/09/we-are-still-city-on-hill-thoughts-on.html By Juan Wilson on 25 November 2009 - The first Thanksgiving was not a time of plenty for the Pilgrims in the New World. Although many of us are unemployed or underemployed right now, supermarket shelves are still overflowing. This still a land of plenty for most of us and we'll all have access to as much turkey and stuffing as we can eat in 2009. For the majority of Americans this may be the last comfy Thanksgiving long time into the future. This might be a good time to say thanks and really mean it. There is some indication that the distribution of 16-pound frozen Butterballs and sealed packages of Pepperidge Farm stuffing-mix might be low the on the list of re-stocking priorities next Thanksgiving. If that's true, we may be scrambling next November to pull off the classic American Turkey Day we've become accustomed to. This is not to say Thanksgiving won't be a meaningful ritual next year... it just might not be a celebration of gluttony. It may be more like the first Thanksgiving in New England over 350 years ago. Then the pilgrim settlers were facing starvation in a new landscape where their traditional food sources were not available. It was with the aide of indigenous Americans using their traditional means that the settlers shared a locovore meal before they faced a long cruel winter. Truly a time to be grateful. When I was growing up Christmas was not on the horizon until after the last of the Thanksgiving leftovers were polished off or thrown out. That's when the Seasonal decorations went up in the stores. The whole holiday season lasted about a month. But that season has been spreading, much like the guts on Americans that it targets. Today Thanksgiving is just one part of an extended consumer shopping season that now stretches from s few weeks before Halloween until the White Sales in January; a full three months of binging. I predict that consumer model will be put in its grave this holiday season. Our holiday celebrations will once more be distinctly different and stand-alone. They will be separated from the defunct credit-card-culture and be related to their spiritual roots based in seasonal change. When I was growing up Thanksgiving was a time when extended family came together. We went to grandma's. Saw the cousins and aunts and uncles. Back then (the 50's and 60's) we came together by car. Thanksgiving is still the time to get together with family and friends; but now its by jet plane. Thanksgiving is now the peak weekend of airline travel in the year. I suspect that that will no longer be the case. Perhaps as soon as next year Thanksgiving will once again be a gathering of neighbors and relations; but sorted by their proximity. Much of the ritual sharing of food will likely come from the back yards and larders near where you live. Of course for generations football had been a traditional part of Turkey Day. When I was a kid football was played outdoors in winter weather. It was played on the radio in the background. But back in the late 60's it was commonly televised live. I came to realize that Thanksgiving had become a place where several unattractive overlapping American tendencies were focusing. 1) Macho Sports, 2) American Patriotism, 3) Corporate Consumerism, 4) Militarism. Support for the War in Vietnam was encouraged with a Marine Band playing the national anthem before the big game. Today football is televised from sunny summer stadiums onto 50" color plasma screens that dominate American homes. The US Air Force Blue Angels jet low over the football half-time as Taylor Swift accompanies the Rolling Stones on a pyramid stage lit by lasers. Now that's culture! Like the Roman Colosseum games, this is the spectacle of empire. Not a pretty site. The future will be brighter as we accept a more humble heart-felt thanks for simpler lives that look forward to another harvest. Let's give thanks, Pilgrim. See also: Island Breath: Give Thanks No More 11/23/05 .

CO2 Curve Ticks Upward

SUBHEAD: Everything we do is tied to energy and climate and the carbon dioxide "ppm" curve tracks ever upward on Mauna Loa.

 By John Heilprin on 23 November 2009 in Google News -
(http://www.google.com/hostednews/ap/article/ALeqM5hplptq9wxlp5eCDFL2Mv5A_H6bcwD9C5EC7O1)



Image above: Photo of the north slope of Maua Loa as seen from Mauna Kea. From http://www.steephill.tv/2006/mauna-kea/pictures/mauna%20loa%20over%20the%20clouds%23.html



MAUNA LOA OBSERVATORY, Hawaii — The readings at this 2-mile-high station show an upward curve as the world counts down to climate talks: Global warming gases have built up to record levels in the atmosphere, from emissions that match scientists' worst-case scenarios.

Carbon dioxide concentrations this fall are hovering at around 385 parts per million, on their way to a near-certain record high above 390 in the first half of next year, at the annual peak.

"For the past million years we've never seen 390. You have to wonder what that's going to do," said physicist John Barnes, the observatory director.

One leading atmospheric scientist, Stephen Schneider, sees "coin-flip odds for serious outcomes for our planet."

Far from this mid-Pacific government observatory, negotiators from 192 nations gather in Copenhagen, Denmark, next month to try to agree on steps to head off the worst of the climate disruptions researchers say will result if concentrations hit around 450 parts per million — in 30 years at the current rate. Some say the world has already passed a danger point, at 350 ppm, and must roll back.

Today's emissions curve is tracking the worst case among seven emissions scenarios set out in 2001 by the U.N.'s Intergovernmental Panel on Climate Change, British climatologists reported in September.

The U.N. expert group projects that such a path would raise global temperatures between 2.4 and 6.4 degrees Celsius (4.3 and 11.5 degrees F) by century's end. That would come on top of a global temperature increase of about 0.6 degrees Celsius (1 degree Fahrenheit) in the past century, a warming trend the IPCC says is mainly due to the buildup of carbon dioxide and other greenhouse gases.

Such warming will shift climate patterns, cause more extreme weather events, spread drought and floods to new areas, kill off plant and animal species, and cause seas to rise from heat expansion and the melting of land ice, the IPCC says.

"Changing several degrees may not seem like much, but we're just changing things too fast," Barnes said. "So the consequences could well be drastic."

The IPCC has urged industrialized countries to reduce global emissions by 25 to 40 percent below 1990 levels by 2020. As of 2007, they stood only 4 percent below 1990 levels, and the rest of the world continued pouring out more and more heat-trapping gases, chiefly from the burning of coal, gasoline and other fossil fuels.

Through this decade global emissions have grown by 23 percent. In 2008, almost three-quarters of the increase came from China, researchers reported last week. Other big contributors among developing countries were India, Saudi Arabia, Brazil, South Africa, South Korea, Indonesia, Iran and Mexico.

Experts see no sign of a slowdown.

It would "probably be at 390 (ppm) next year at Mauna Loa," said Fred T. Mackenzie, a professor emeritus of oceanography at the University of Hawaii at Manoa. That would represent almost a 40-percent increase in carbon-dioxide density in the atmosphere since before the industrial age and extensive use of fossil fuels.

Schneider, a Stanford University climatologist, said the world faces a huge risk.

"I think meters of sea-level rise are virtually inevitable, unless we can stop this. But I'm not such an optimist," he told journalists on a fellowship program with the Honolulu-based East-West Center. "The main message is we're in risk management. We do not know the science well enough to know exactly what the temperature is at when a tipping point will occur."

This U.S. government observatory, 11,141 feet up Mauna Loa's northern flank, also measures methane and other significant greenhouse gases. It was here on Hawaii's Big Island that climatologist Charles David Keeling pioneered the measurement of carbon dioxide in the atmosphere, installing his experimental manometer on the gently sloping volcano in 1958.

He chose the site, already a U.S. Weather Service station, because the trade winds blowing over it had some of the cleanest air on the planet. Barnes said the CO2 measurements here, thousands of miles from major industry, were the first to show that manmade carbon dioxide emissions were accumulating throughout the global atmosphere.

The upward trend, averaging 1.9 parts per million per year in the past decade, undergoes seasonal fluctuations. In summer, during the growing season, plants absorb carbon dioxide from the atmosphere. But in winter, the concentration of C02 rises as vegetation and other biomass decompose.

The observatory is part of the National Oceanic and Atmospheric Administration's worldwide network for measuring greenhouse gases. It coordinates measurements with other U.S.-run research stations in Alaska, California, American Samoa and the South Pole. Japan and Australia also run such networks.

The Mauna Loa researchers extend their measurements through their "flask network" — containers sent to dozens of places around the world each week or carried on commercial ships so people can fill them with air and send them back to be measured for C02 and other gases.

Barnes, watching the carbon dioxide "ppm" curve track ever upward on Mauna Loa, while some other greenhouse gases decline, noted that long-lived CO2 is "more and more the bigger player."

"It is going into the ocean, and there's some plant uptake, but a whole lot of it just goes into the air and it's going to stay there for thousands of years," he said.

See also:
NOAA Mauna Loa Observatory: http://www.mlo.noaa.gov/
Ea O Ka Aina: Climate Change and Kauai 11/22/09

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Tim Geithner's Disgrace

SUBHEAD: Geithner doesn't know how to negotiate, doesn't understand what cards he holds, and doesn't understand the need for fundamental reform. Image above: Collage of Minotaur playing Tim Geithner for a fool. From http://www.drunkard.com/issues/07_05/0705_poker_guide.htm Modified by Juan Wilson.

By Eliot Spitzer on 23 November 2009 in Slate Magazine - (http://www.slate.com/id/2236460)

The issue has been festering for months: Why were AIG's counterparties—including Goldman Sachs, JPMorgan Chase, and UBS—paid 100 cents on the dollar when the feds rescued the insurance giant, helping raise the cost of the bailout to nearly $200 billion? A new report issued by Special Inspector General Neil Barofsky now reveals that government officials, notably then-New York Fed President and current Treasury Secretary Timothy Geithner, grievously damaged the nation and capitulated to the very banks they should have been supervising.

Barofsky's report reads like a case study in failed negotiation. The New York Fed didn't have the backbone to stand up to Wall Street, didn't understand its capacity to protect taxpayers, and didn't appreciate that its responsibility was to taxpayers.

Geithner and the Fed have proffered a series of spurious reasons for their willingness to pay AIG's counterparties—the leading Wall Street banks—in full while demanding concessions from every other entity with whom the Treasury or the Fed dealt. Geithner suggested he could not use the threat of AIG's default in the absence of a federal bailout to get concessions from AIG's creditors. Why not?

That is exactly what the government did with the auto industry, and rightly so. The entity providing financing to a near-bankrupt institution must always seek contributions from everyone else at risk. The fact that the Fed had a strong predisposition against letting AIG go into bankruptcy didn't mean the Fed shouldn't have used every opportunity to wrangle concessions from the other parties. For Geithner to say it would have been "unethical" to negotiate for concessions is sheer silliness. It is akin to saying that having decided that you are willing to pay up to $250,000 for a house, it is unethical to negotiate to buy it for $225,000.

Geithner also claims that using the possibility of AIG's default as a negotiating opportunity would have cast doubt on the government's commitment to financial stability. What? Seeking to get other parties to share the burden demonstrates a lack of commitment to restoring financial stability and market-based realities? Pressuring Goldman and the other counterparties to offer concessions would have forced them to absorb the consequences of making suspect deals with an insurance company that was essentially a Ponzi scheme. Forcing them to give concessions would have been one small step toward ending the moral hazard the Fed had allowed to flourish for years.

Geithner also claims that refusal to pay 100 cents on the dollar might have been misinterpreted by the rating agencies and so cast a shadow on AIG's credit rating. Huh? AIG was flat-lining. The only way to restore its credit rating was for the government to bail it out—and to negotiate the best possible deal while doing so.

Perhaps most remarkable is that Geithner claims the "sanctity of contract" prevented renegotiating with the counterparties. But the government wasn't a party to these contracts! The government was stepping in with taxpayer money to save a broken company on terms to be set by the government. The counterparties had the contractual right to refuse the terms, throw AIG into bankruptcy, and suffer the consequences. In a workout context, the entity with cash—here, the government—can set the terms, and the other parties can either accept those terms or walk over to bankruptcy court. The government had absolutely no contractual obligation to do anything.

Also amazing is Geithner's assertion that he and the Fed were acting on behalf of AIG. Perhaps nothing is more fundamental than knowing whom you represent. Geithner and the Fed were supposed to be acting on behalf of taxpayers and citizens, not AIG. Their effort was supposed to get the best result for taxpayers: preserving the structure of the economy and stopping a free fall. That—not preserving AIG's market value—was the rationale for intervention. Once tax dollars were at stake, Geithner should have been asking how to achieve the best economic result while minimizing taxpayers' exposure.

Geithner has tried to deflect some of this criticism by suggesting that it is "untainted by experience." I would suggest that it is Geithner who displays lack of experience in his dealing with the financial community. He doesn't know how to negotiate, doesn't understand what cards he holds, and doesn't understand the need for fundamental reform.

See also: Ea O Ka Aina: Financial Follies 2.0 10/8/09

Red Alert

SUBHEAD: The second wave of the financial tsunami is gathering force and will hit in the first half of 2010. Image above: Still of SNL skit with Obama and Chinese leader Wen Jiabao. From http://www.hulu.com/watch/110317/saturday-night-live-china-cold-open By Matthias Chang on 24 November 2009 in Global Research - (http://www.globalresearch.ca/index.php?context=va&aid=16218) Many of my friends who have been receiving my e-mail alerts over the last two years have lamented that in recent weeks I have not commented on the state of the global economy. I appreciate their anxiety but they forget that I am not a stock market analyst who is paid to write articles to lure investors back into the market. My website is free and I do not sell a financial newsletter so there is no need for me to churn out daily forecasts or analysis. However, when the data is compelling and supports an inevitable trend, it is time for another review. This Red Alert is to enable visitors to my website to take appropriate actions to safeguard their wealth and welfare of their families in the coming months. Since the last quarter of 2008, unrelenting currency warfare has been waged by the key global economies and while this competition thus far has been non-antagonistic, it will soon be antagonistic because the inherent differences are irreconcilable. The consequences to the global economy will be devastating and for the ordinary people, massive unemployment and social unrest are assured. The policy-makers of these countries faced with the total collapse of the international financial architecture have concluded that the solution, the only solution is quantitative easing (i.e. massive injection of liquidity) to salvage the “too big to fail” banks and reflate their depressed economies. This is best reflected in Bernanke’s candid remark that, “the US government has a technology, called the printing press (or today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost”. This is the crux of the problem! The Irreconcilable Differences Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of: 1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries. 2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies. The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle. Once we grasp this fundamental truth, Bernanke’s boast that the “US can produce as many US dollars as it wishes at no cost” takes on a different dimension. I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances... the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China’s massive surpluses on the other. Incredible wisdom and almost everyone echoes this mantra. The recent concluded APEC Summit was no different. This mantra was repeated as well as the call for freer trade between trading nations. This is a grand hoax. All the current leaders on the world’s stage are corrupted to the rotten core and as such have no interest to call a spade a spade and expose the inherent contradictions within the existing financial system. The call for a multi-polar world is meaningless when the entire global financial system is based on the unipolar US dollar reserve currency. This is the inherent contradiction within the present system and the problems associated with it cannot be resolved by another global reserve currency based on the IMF’s Special Drawing Rights as advocated by some countries. It was stillborn, the very moment it was conceived! The leaders of China, Japan and the oil producing countries of the Middle East are all cursing and pissing about the current situation, but they don’t have the courage of their convictions to spell it out to their countrymen that they have been conned by the financial spin masters from the Fed acting on the instructions from Goldman Sachs. Tell me which leader would dare admit that they have exchanged the nation’s wealth for toilet papers? The toilet paper currency pantomime continues. We have now reached a stalemate in the current currency war, not unlike the situation of the Cold War between the NATO pact countries and the Warsaw pact countries. Both sides were deterred by the MAD (Mutually Assured Destruction) doctrine of nuclear wars. The costs to both sides were horrendous and it was only when the Soviet Union could not continue with the pace and cost of maintaining a nuclear deterrent and was forced into bankruptcy that the balance tilted in favour of the NATO alliance. But it was a pyrrhic victory for the US and it allies. What kept the ability of the US to maintain its military might and outspend the Soviet Union was the right to print toilet paper currency and the acceptance of the US dollar by her allies as the world’s reserve currency. But why did the countries allied to the US during the Cold War accepted the status quo? Simple! They were all conned into believing that without the protection of Big Brother and its military outreach, they would be swallowed up by the communist menace. They agreed to march to the tune of the US Pied-Piper. The next big question – why did the so-called “liberated” former communist allies of the Soviet bloc jump on the bandwagon? Simple! They all believed in the illusion that was fostered by the global banks, led by Goldman Sachs that trading and selling their goods and services for the toilet paper US reserve currency would ensure untold wealth and prosperity. But the biggest game in town was the Asia gambit. Japan, after a decade of recession following the burst of her property bubble did not have the means and the capacity to bring the game to the next level as envisaged by the financial architects in Goldman Sachs. And China was the biggest beneficiary. The senior management of Goldman Sachs brokered a secret pact with China’s leaders that in exchange for orchestrating the most massive injection of US dollar capital and wholesale re-location of manufacturing capacity in the history of the global economy, China would recycle their hard-earned US toilet paper reserve currency wealth into US treasuries and other US debt instruments. This was the necessary condition precedent for the global financial casino to rise to the next level of play. Why? The New Game The financial architects at Goldman Sachs had a master plan – to dominate the global financial system. The means to achieve this financial power was the Shadow Banking System, the lynchpin being the derivative market and the securitization of assets, real and synthetic. The stakes would be huge, in the hundreds of US$ trillions and the way to transform the market was through massive leverage at all levels of the financial game. But there was an inherent weakness in the overall scheme – the threat of inflation, more precisely hyperinflation. Such huge amounts of liquidity in the system would invariably trigger the depreciation of the reserve currency and the confidence in the system. Hence the need for a system to keep in check price inflation and the illusion that the purchasing power of the toilet paper reserve currency could be maintained. This is where China came in. Once China became the world’s factory, the problem would be resolved. When a suit which previously cost US$600 could be had for less than US$100, and a pair of shoes for less than US$5, the scam masterminds concluded that there would be no foreseeable threat to the largest casino operation in history. China agreed to the exchange as it has over a billion mouths to feed and jobs for hundreds of millions needed to be secured, without which the system could not be maintained. But China was pragmatic enough to have two “economic systems” – a Yuan based domestic economy and a US$ based export economy, in the hope that the profits and benefits of the export economy would enable China to transform and establish a viable and dynamic domestic market which in time would replace the export dependent economy. It was a deal made with the devil, but there were no viable alternative options at the material time, more so after the collapse of the Soviet Union. The Next Level of the Game The next level of the game was reached when the toilet paper reserve currency literally went virtual – through the simple operation of a click of the mouse in the computers of the global banks. The big boys at Goldman Sachs and other global banks were more than content to leave Las Vegas for the mafia and their miserable billions in turnover. The profits were considered dimes when compared to the hundreds of trillions generated by the virtual casino. It was a financial conquest beyond their wildest dreams. They even called themselves, “Master of the Universe”. Creating massive debts was the new game, and the big boys could even leverage more than 40 times capital! Asset values soared with so much liquidity chasing so few good assets. However, the financial wizards failed to appreciate and or underestimate the amount of financial products that were needed to keep the game in play. They resorted to financial engineering – the securitization of assets. And when real assets were insufficient for securitization, synthetic assets were created. Soon enough, toxic waste was even considered as legitimate instruments for the game so long as it could be unloaded to greedy suckers with no recourse to the originators of these so-called investments. For a time, it looked as if the financial wizards have solved the problem of how to feed the global casino monster. Unfortunately, the music stopped and the bubble burst! And as they say the rest is history. The Goldman Sachs Remedy When losses are in the US$ trillions and whatever assets / capital remaining are in the US$ billions, we have a huge problem – a financial black-hole. The preferred remedy by the financial masterminds at Goldman Sachs was to create another hoax – that if the big global banks were to fail triggering a systemic collapse, there would be Armageddon. These “too big to fail” banks must be injected with massive amount of virtual monies to recapitalize and get rid of the toxic assets on their balance sheet. The major central banks in the developed countries in cahoots with Goldman Sachs sang the same tune. All sorts of schemes were conjured to legitimize this bailout. In essence, what transpired was the mere transfer of monies from the left pocket to the right pocket, with the twist that the banks were in fact helping the Government to overcome the financial crisis. The Fed and key central banks agreed to lend “virtual monies” to the “too big to fail” global banks at zero or near zero interest rate and these banks in turn would “deposit” these monies with the Fed and other central banks at agreed interest rates. These transactions are all mere book entries. Other “loans” from the Fed and central banks (again at zero or near zero interest rates) are used to purchase government debts, these debts being the stimulus monies needed to revive the real economy and create jobs for the growing unemployed. So in essence, these banks are given “free money” to lend to the government at prior agreed interest rates with no risks at all. It is a hoax! These “monies” are not even the dollar bills, but mere book entries created out of thin air. So when the Fed injects US$ trillions into the banking system, it merely credits the amount in the accounts of the “too big to fail” banks at the Fed. When the system is applied to international trade, the same modus operandi is used to pay for the goods imported from China, Japan etc. For the rest of world, when buying goods denominated in US$, these countries must produce goods and services, sell them for dollars in order to purchase goods needed in their country. Simply put, they have to earn an income to purchase whatever goods and services needed. In contrast, all that the US needs to do is to create monies out of thin air and use them to pay for their imports! The US can get away with this scam because it has the military muscle to compel and enforce this hoax. As stated earlier, this status quo was accepted especially during the Cold War and with some reluctance post the collapse of the Soviet Union, but with a proviso – that the US agrees to be the consumer of last resort. This arrangement provided some comfort because countries which have sold their goods to the US, can now use the dollars to buy goods from other countries as more than 80 per cent of world trade is denominated in dollars especially crude oil, the lifeline of the global economy. But with the US in full bankruptcy and its citizens (the largest consumers in the world) being unable to borrow further monies to buy fancy goods from China, Japan and the rest of the world, the demand for dollar has evaporated. The dollar status as a reserve currency and its usefulness is being questioned more vocally. The End Game The present fallout can be summarized in simple terms: Should a bankrupt country (the US) be allowed to use money created out of thin air to pay for goods produced with the sweat and tears of hardworking citizens of exporting countries? Adding insult to injury, the same dollars are now purchasing a lot less than before. So what is the use of being paid in a currency that is losing rapidly its value? On the other hand, the US is telling the whole world, especially the Chinese that if they are not happy with the status quo, there is nothing to stop them from selling to the other countries and accepting their currencies. But if they want to sell to the mighty USA, they must accept US toilet paper reserve currency and its right to create monies out of thin air! This is the ultimate poker game and whosoever blinks first loses and will suffer irreparable financial consequences. But who has the winning hand? The US does not have the winning hand. Neither has China the winning hand. This state of affairs cannot continue for long, for whatever cards the US or China may be contemplating to throw at the table to gain strategic advantage, any short term gains will be pyrrhic, for it will not be able to address the underlying antagonistic contradictions. When the survival of the system is dependent on the availability of credit (i.e. accumulating more debts) it is only a matter of time before both the debtor and creditor come to the inevitable conclusion that the debt will never be paid. And unless the creditor is willing to write off the debt, resorting to drastic means to collect the outstanding debt is inevitable. It would be naïve to think that the US would quietly allow itself to be foreclosed! When we reach that stage, war will be inevitable. It will be the US-UK-Israel Axis against the rest of the world. The Prelude to the End Game The US economy will be spiraling out of control in the coming months and will reach critical point by the end of the 1st quarter 2010 and implode by the 2nd quarter. The massive US$ trillions of dollars stimulus has failed to turn the economy around. The massive blood transfusion may have kept the patient alive, but there are numerous signs of multi-organ failure. There will be another wave of foreclosures of residential and more importantly commercial properties by end December and early 2010. And the foreclosed properties in 2009 will lead to depressed prices once they come through the pipeline. Home and commercial property values will plunge. Banks’ balance sheets will turn ugly and whatever “record profits” in the last two quarters of 2009 will not cover the additional red ink. Given the above situation, will the Fed continue to buy mortgage-backed securities to prop up the markets? The Fed has already spent trillions buying Fannie Mae and Freddie Mac mortgages with no potential substitute buyer in sight. Therefore, the Fed’s balance sheet is as toxic as the “too big to fail” banks that it rescued. In the circumstances, it makes no sense for anyone to assert that the worst is over and that the global economy is on the road to recovery. And the surest sign that all is not well with the big banks is the recent speech by the President of the Federal Reserve Bank of New York, William Dudley at Princeton, New Jersey when he said that the Fed would curtail the risk of future liquidity crisis by providing a “backstop” to solvent firms with sufficient collateral. This warning and assurance deserves further consideration. Firstly, it is a contradiction to state that a solvent firm with sufficient collateral would in fact encounter a liquidity crisis to warrant the need for a fall back on the Fed. It is in fact an admission that banks are not sufficiently capitalized and when the second wave of the tsunami hits them again, confidence will be sorely lacking. Dudley actually said that, “the central bank could commit to being the lender of last resort... [and this would reduce] the risk of panics sparked by uncertainty among lenders about what other creditors think”. To put it bluntly what he is saying is that the Fed will endeavour to avoid the repeat of the collapse of Bear Stearns, Lehman Bros and AIG. It is also an indication that the remaining big banks are in trouble. It is interesting to note that a Bloomberg report in early November revealed that Citigroup Inc and JP Morgan Chase have been hoarding cash. The former has almost doubled its cash holdings to US$244.2 billion. In the case of the latter, the cash hoard amounted to US$453.6 billion. Yet, given this hoarding by the leading banks, the New York Federal Reserve Bank had to reassure the financial community that it is ready to inject massive liquidity to prop up the system. It should come as no surprise that the value of the dollar is heading south. When currencies are being debased, volatility in the stock market increases. But the gains are not worth the risks and if anyone is still in the market, they will be wiped out by the 1st quarter of 2010. The S&P may have shot up since the beginning of the year by over 25 per cent but it has been out-performed by gold. The gains have also lagged behind the official US inflation rate. It has in fact delivered a total return after inflation of approximately minus 25 per cent. When Meredith Whitney remarked that, “I don’t know what’s going on in the market right now, because it makes no sense to me”, it is time to get out of the market fast. In a report to its clients, Société Générale warned that public debt would be massive in the next two years – 105 per cent of GDP in the UK, 125 per cent in the US and in Europe and 270 per cent in Japan. Global debt would reach US$45 trillion. At some point in time, all these debts must be repaid. How will these debts be repaid? If we go by what Bernanke has been preaching and practising, it means more toilet paper currency will be created to repay the debts. As a result, debasement of currencies will continue and this will further aggravate existing tensions between the competing economies. And when creditors have enough of this toilet paper scam, expect violent reactions!

Urban Farming Revolution

SUBHEAD: What if we were to grow food, demonstrate the principles of sustainability, and provide green education and employment in our own neighborhoods? Image above: A CERES urban farm photo from article. By Niall Fahy on 23 November 2009 in Reality Sandwich - (http://www.realitysandwich.com/urban_farming_revolution)

An Australian sustainability collective has come up with a novel approach to bringing ecological organic food production into our cities. Their design is fast, efficient, cheap, demountable, and scalable. Welcome to the urban farming revolution proposed by CERES.

Cities, in the normal scheme of things, suck inordinate amounts of resources from the surrounding countryside. They are massive energy sinks, guzzling power and food while producing tonnes of carbon dioxide and waste. Moreover, the city limits demarcate a perceived division between synthetic and natural -- between the high speed sophistication of modern civilization and the relative placidity of agrarian life. We often tend to think that in our living arrangements one has to largely forsake one's connection to either culture or nature.

Climate change and the approach of peak oil will demand localization of food and energy production. With this in mind, CERES (the Center for Education and Research in Environmental Strategies) -- a community based model of sustainable society in the metropolis of Melbourne, Australia -- plans to build a number of modular high-density organic farming hubs on disused pieces of land throughout the city.

These intensive urban mini-farms are designed to be highly productive, energy efficient, customizable, and cheap to build using shipping containers and plastic poly-tunnels. Incorporating aquaponic vegetable cultivation, fish farming, mushroom production, beehives, and a food processing and distribution service, the farms are designed within the permaculture ethos of mimicking nature's flows. The waste of one process becomes fuel for the next, and each stage of the process yields a product.

Aquaponic farming means that water (rather than soil) is used as a medium in which to grow plants. In an urban setting, this solves the all-too-likely issue of soil contamination due to industrial pollution. In the CERES model the aquaponic system will be fertilized using water pumped from the fish farm beneath, which is rich in nutrients from their waste. The fish are fed vegetable scraps and worms grown in mushroom compost. Root systems of tomatoes, cucumbers, eggplants, leafy greens, strawberries, sprouts, and herbs will in turn clean the water before it recirculates to the fish.

Biodigesters that can decontaminate organic waste and turn it into usable energy are another potential component of this rapid-turnover design, as are solar panels and a water harvesting system. The food distribution area -- which will operate as a co-operative -- could also function as a café, education center, and community social space. As no permanent structures are built, the need for planning permission is eliminated, making the hubs easier to implement and also more palatable to any property developers or government bodies that may end up being involved.

One of these farms can be set up within a week, and the first will be installed in Melbourne in early 2010. The project's proponents want this to be the first of many, and are talking to the local Office of Housing and Schools, seeking pieces of land that will be available for as little as three years. And they can't wait to see what people around the world will do with their idea. In the spirit of emerging P2P information-sharing paradigms such as that of Missouri's Open Source Ecology, the hubs will be intended to inspire people all over the world to follow suit and refine the designs to fit their own local needs.

Given sufficient opportunity, the concept could provide a significant portion of the city's food while providing education and employment for hundreds of urban farmers and installers. Through being empowered in this way, communities can become more self-sufficient, not to mention happier. Chris Ennis, organic farm manager and co-designer of the hub scheme, told me that "I see people light up when they're participating in meaningful work like this. Helping to feed your neighbors is a worthwhile thing to do."

Image above: CERES 10 acres site in Brunswick East, Victoria, Australia. From http://en.wikipedia.org/wiki/CERES_Community_Environment_Park

CERES has always been about demonstration and inspiration. Started 25 years ago on the site of a former garbage dump, it is now a green haven in the midst of the city that is visited by 70,000 schoolkids and 400,000 adults every year. The 10 acre center runs on renewable energy, is a 55 tonne carbon sink, conserves and recycles its water and waste, grows organic food, and teaches diverse audiences about socially and environmentally conscious ways of living.

Central to the concept is that sustainability initiatives are located in a participatory social setting. At CERES this entails community arts and music festivals, an organic garden and market/food co-op, a plant nursery, a bicycle workshop, a café, community and school gardens, an energy park, weekly sweat lodges, and numerous experiential education programs.

It began with the dream of a few progressive community thinkers, to create a place that would demonstrate principles of sustainability and social equity, in an atmosphere of community participation. They chose the name Ceres (pronounced "eries") -- that of the Roman goddess of agriculture. Since those humble beginnings the project has grown to employ 200 people and is an incorporated Not For Profit organization governed by a Committee of Management. The group's website describes their story as an evolutionary journey, acknowledging the interconnectedness of everything from our breath to the trees, to the stars formed in the Big Bang, to the Wurundjeri -- original inhabitants of the land upon which the undertaking stands.

There is no pollyanna-esque naiveté at work here; the organization's literature acknowledges the gravity of our present global situation and the crucial need to change the underlying value system that has produced such hideous disparity between rich and poor, such abominable destruction of the natural world. The CERES website states that they are "committed to redefining purpose, values, success and happiness in terms of the wellbeing of our relationships with one another and the environment. We see this as the bedrock on which to build a new way of being now and for the future. Here our needs are fulfilled as a natural outcome of our enhanced relationships with each other and the earth. Here our wants are aligned with the inherent nature of the earth to unfold in complexity, diversity and beauty."

Modern social and ecological activism is evolving. Efforts to change the status quo -- when practiced in a self-righteous or condemnatory tone -- often serve to divide and fragment rather than unite and heal. Through demonstrating positive and creative ways of living for anyone who cares to stop by, CERES have found that they "ignite and support people's passions for a better world."

The vision is that sustainability need not entail a return to antiquated ways of living, but can merely mean the incorporation of innovative technology into a respectfully treated environment. This sharing of their aspirations for urban farming is one way they hope to tap into the global community's yearning for reconnection with the Earth, feed their neighbors, and help to make our cities places where nature is not absent.

See also: Ea O Ka Aina: Urban Farming is the future 8/18/09 Ea O Ka Aina: How Cuba survived Peak Oil 9/10/09 Ea O Ka Aina: City farming with livestock 9/27/09

New Orleans and Kauai

SOURCE: Linda Harmon (harmonl001@hawaii.rr.com) SUBHEAD: A ruling against the Army Corps of Engineers in New Orleans may have an impact in Hanapepe Valley. [Editor's Note: After the Koloko Dam failure on Kauai in 2006, The Army Corps of Engineers ordered that the embankments of the Hanapepe River levees be stripped of all vegetation for inspection. The County has complied with backhoes and herbicides and kept the levees bare ever since. Subsequently the levees have suffered accelerated erosion and runoff. It's banks have continued being scoured away. No repairs have been begun or even proposed. Are our government agencies waiting for a disasterous flood to be spurred to action?] Image above: The stripped and eroded Hanapepe levee after orders from the Army Corps. Photo by Juan Wilson 3/28/07 By Richard Fausset on 19 November 2009 in the LA Times - (http://www.latimes.com/news/nation-and-world/la-na-katrina-flooding19-2009nov19,0,3370102.story) In a ruling that could leave the government open to billions of dollars in claims from Hurricane Katrina victims, a federal judge said late Wednesday that the U.S. Army Corps of Engineers had displayed "gross negligence" in failing to maintain a navigation channel -- resulting in levee breaches that flooded large swaths of greater New Orleans. U.S. District Judge Stanwood R. Duval peppered his 156-page decision, issued in New Orleans, with harsh criticism of the Army corps, at one point citing its "insouciance, myopia and shortsightedness" in failing to maintain the Mississippi River-Gulf Outlet, known locally as MRGO. Image above: A helicopter drops sandbags on broken levee after Hurricane Katrina in New Orleans. For more than 40 years, the judge said, the corps had known that a crucial levee protecting suburban St. Bernard Parish and the Lower 9th Ward neighborhood would be compromised by the deterioration of the channel. The corps had "myriad" ways to address the problem, he wrote, but failed to do so. Duval awarded a total of $719,000 to a small group of flood victims that sued the government in April 2006. But according to Pierce O'Donnell, the lead plaintiff's counsel, roughly 100,000 New Orleans-area residents and businesses who have filed flood-damage claims with the Army corps were now potentially eligible for payment. In a phone interview, O'Donnell hailed what he called a historic ruling, one that backed the widely held contention in New Orleans that the 2005 catastrophe was not just the fault of Mother Nature. "The judge agreed with us that Katrina was not a natural disaster," O'Donnell said. "Katrina was a man-made disaster caused by the Army Corps of Engineers." In a statement Wednesday, the Army corps said only that the opinion was being reviewed by lawyers from the Army and Justice Department. "We have no further comment at this time as the issues involved in the case are still subject to further litigation," the corps said. At the heart of the case was maintenance and operation of the Mississippi River-Gulf Outlet. The channel, which was decommissioned after Katrina, was completed in the 1960s as a shipping shortcut between New Orleans and the Gulf of Mexico. Over the years, the marshy banks of the channel had widened significantly in spots -- and long before Katrina hit, experts had warned that the destruction of wetlands could create a funnel effect that would intensify storm surges. During the trial, attorneys for the government argued that the Army Corps of Engineers was not liable for the post-hurricane flooding because it was immune from civil lawsuits questioning federal flood policy decisions. But Duval found that such "gross negligence" overrode any immunity claim. His opinion, however, does not apply to residents of New Orleans East, another badly flooded part of the region where O'Donnell had hoped to score a victory. Duval ruled that the Army corps was not negligent for failing to build a surge protection barrier there. The overall ruling could create problems for the Obama administration, which has promised to bring more attention and care to New Orleans than was evident during President George W. Bush's administration. Katrina, one of the worst disasters in U.S. history, caused more than 1,800 deaths in the Gulf Coast states and wreaked billions of dollars in property damage. In New Orleans, the storm surge breached levees in several places, flooding about 80% of the city. Many residents were left trapped on roofs or in attics for days. The federal government has promised tens of billions of dollars in post-storm rebuilding aid to Louisiana. The Justice Department has estimated that the total outstanding civil claims could amount to billions more. But those claimants, O'Donnell said, might not be paid until the appeals process is exhausted, which could last years. He called upon the Obama administration and Congress to agree to a universal settlement -- something he said the Bush administration had pledged not to do. O'Donnell said his team had filed a separate legal action that seeks to cover those thousands of victims in a class-action suit. He noted that the federal government had agreed to universal settlements in past cases in which it had erred, including after a 1976 failure of the Teton Dam in Idaho and the 2000 Cerro Grande fire in New Mexico, which started as a federal controlled burn.

Courting Convulsion

SUBHEAD: Going into Thanksgiving 2009, America's leadership has dedicated itself to the worst action it could take under the circumstances.


By James Kunstler on 23 November 2009 in www.Kunstler.com - 
(http://kunstler.com/blog/2009/11/courting-convulsion.html)

Image above: Previously published in an article about Thanksgiving in IslandBreath.org From an illustration at http://www.worth1000.com

How infantile is American society? Last night's CBS "Business Update" (in the midst of its "60 Minutes" program) featured three items: 1.) The New Moon teen vampire movie led the weekend box-office receipts; 2.) Cadbury shares hit an all-time high; 3.) Michael Jackson's rhinestone-studded white glove sold at auction for $350,000.

Some in-house CBS-News producer is responsible for this fucking nonsense. How does he or she keep her job? Is there no adult supervision at the network?

Meanwhile, over at The New York Times this morning, Paul "Nobel Prize" Krugman writes:

"Most economists I talk to believe that the big risk to recovery comes from the inadequacy of government efforts; the stimulus was too small, and it will fade out next year, while high unemployment is undermining both consumer and business confidence."

Disclosure: I'm not one of the economists that Mr. Krugman talks to (nor am I an economist). But it's sure interesting to know that the ones palavering with Mr. Krugman imagine that the US can possibly return to an economy based on the fraudulent securitization of reckless debt.

Does Mr. Krugman think that the production housing industry can resume paving over the nether exurbs with half-million-dollar houses (to be bought with no money down loans by the sheet-rockers working inside them)?

Does he think all those people receiving cancellation notices from their credit card issuers are in a position to flash their plastic at the Gallerias this Friday?

Or ever will be again?

Is he perhaps misusing the term "recovery?"

After all, that is generally taken to mean resuming a prior state, which is, in turn, presumed to be a healthy prior state. Is that what the economy of the past decade was?

And, incidentally, what exactly is a "consumer?" And why, at the highest levels of journalism in this land, do we refer to citizens that way? As if the American people have no other purpose except to buy things? Or is that that the only way an "economist" can imagine them?

I'm sorry to burden the reader with so many questions, but the idiots running the mainstream news media in this land are not doing it and somebody has to.

If a "recovery" is not in the cards, then what exactly is going on out there?

What's going on in the US economy is a slow-motion convulsion from which we will emerge as a very different nation with a different economy. The wild irresponsibility of the media in pretending otherwise is only going to make the convulsion worse, more painful, more socially and politically destructive.

The convulsion can be described with precision as one of compressive contraction. Historic circumstances are requiring us to change our behavior, to make new arrangements for everyday life in all the major particulars: capital accumulation and deployment; food production; commerce; habitation; transport; education; and health care.

These new arrangements must be organized at a smaller and finer scale, and on a much more local basis.

The main "historic circumstance" mandating these changes goes under the heading of "peak oil." We've come to the end of our ability in this world to increase energy inputs to the global economy. The routine "growth" in industrial activity and production that has been the basis of our financial arrangements for 200-odd years is no longer possible.

Offsetting this decline in oil energy "input" with "alt.energy" is a dangerous fantasy because it distracts us from the urgent task of making new arrangements for trade, food production, et cetera - the very things that would provide jobs and social roles for our citizens in the future.

We are seeing a comprehensive failure of leadership in every sector and every level of American life - in politics, business, banking, education, news media, medicine, and the clergy.

All are determined to pretend that we can somehow continue the habits and behaviors of the pre peak oil era. They are all unwilling to face reality, and are all engaged in mutually supporting each other's dangerous fantasies.

If we don't attend to the transformation of American life by downscaling our activities and changing the way they are carried out, and re-localizing them, we will see our society disintegrate - and I use the word "dis-integrate" with purposeful precision. Everything will come apart - our political arrangements, our households, our health and well-being.

At the moment, banking is disintegrating. It's happening because the end of regular, predictable, cyclical, industrial growth means the end of our ability to generate credit without limits, and in fact we passed this point by stealth some time ago leaving the banks in "Wile E. Coyote" suspension above an abyss, where they have lately been joined by government at all levels and the indebted citizens of the land.

The profound nausea spreading through the offices of America is the somatic recognition of exactly where we are in all this: off the cliff.

It's important to remind readers that so-called "capitalism" is not to blame. Capitalism is not an ideology. It refers to a set of laws governing the disposition of surplus wealth.

There is going to be surplus wealth somewhere in the years ahead, even if our living standards fall substantially, even under the strictures of peak oil. All the communist experiments of the 20th century produced some kind of surplus wealth.

All of them were subject to the phenomenon of compound interest.

What matters in the disposition of capital are the rules created for accumulating and deploying it. In the USA the past two decades, we ignored the rules, repealed some of the critical laws, and failed to enforce the existing ones so that, when faced by the historic circumstances of peak oil, we allowed fraud and swindling to run wild - just at the moment when we should have taken the most care. That is why our money system ran off the rails.

We're now seeing worldwide a kind of race between the assertion of peak oil and the failures of capital management as to which will provoke a widespread convulsion first. They are obviously related and whichever gets us in the most trouble fastest, our destination is the same: the absolute necessity to reorganize how we live.

Among the many elements of this is the fact that "globalism," in the Thomas Friedman sense of the word, is over. The urgent need to re-localize economies makes this self-evident.

As a practical matter for us, this means committing to import replacement - making things we need in the US, probably much more regionally. "Globalism" now joins the many other fantasies that we can no longer indulge in.

At the moment, going into Thanksgiving 2009, America's leadership has dedicated itself to the worst action it could take under the circumstances: a campaign to sustain the unsustainable. This is what's embodied in the foolish term "recovery."

The way we try to explain things to ourselves matters, if we don't want to be crushed by history. Go back to the top of this blog and look at the things we pay attention to.

Aren't you ashamed?

.

The War on Soy

SOURCE: Ken Taylor (taylork021@hawaii.rr.com) SUBHEAD: Why the 'Miracle Food' May Be a Health Risk and Environmental Nightmare. Image above: Field of commercial soy crop. From http://www.nutri-tech.com.au/blog/?p=136 By Tara Lohan on 21 November 2009 in AlertNet - (http://www.alternet.org/water/144074/the_war_on_soy) These days, you can get soy versions of just about any meat -- from hot dogs to buffalo wings. If you're lactose-intolerant you can still enjoy soy ice-cream and soy milk on your cereal. If you're out for a hike and need a quick boost of energy, you can nibble on soy candy bars.

Soy is a lucrative industry. According to Soyfoods Association of North America, from 1992 to 2008, sales of soy foods have increased from $300 million to $4 billion. From sales numbers to medical endorsements, it would seem that soy has reached a kind of miracle food status.

In 2000 the American Heart Association gave soy the thumbs up and the FDA proclaimed: "Diets low in saturated fat and cholesterol that include 25 grams of soy protein a day may reduce the risk of heart disease." Over the course of the last decade medical professionals have touted its benefits in fighting not just cardiovascular disease, but cancers, osteoporosis and diabetes.

But soy's glory days may be coming to an end. New research is questioning its health benefits and even pointing out some potential risks. Although definitive evidence may be many years down the road, the American Heart Association has quietly withdrawn its support. And some groups are waging an all-out war, warning that soy can lead to certain kinds of cancers, lowered testosterone levels, and early-onset puberty in girls.

Most of the soy eaten today is also genetically modified, which may pose another set of health risks. The environmental implications of soy production, including massive deforestation, increased use of pesticides and threats to water and soil, are providing more fodder for soy's detractors.

All of this has many people wondering if they should even be eating it at all. And you are most likely eating it. Even if you're not a vegetarian or an avid tofu fan, there is a good chance you're still eating soy. Raj Patel, author of Stuffed and Starved, explains that soy is now an ingredient in three-quarters of processed food on the market and just about everything you'd find in a fast food restaurant. It's used as filler in hamburgers, as vegetable oil and an emulsifier. It's in salad dressing, macaroni and cheese, and chicken nuggets.

"Even if you read every label and avoid cardboard boxes, you are likely to find soy in your supplements and vitamins (look out for vitamin E derived from soy oil), in foods such as canned tuna, soups, sauces, breads, meats (injected under poultry skin), and chocolate, and in pet food and body-care products," wrote Mary Vance for Terrain Magazine. "It hides in tofu dogs under aliases such as textured vegetable protein, hydrolyzed vegetable protein, and lecithin--which is troubling, since the processing required to hydrolyze soy protein into vegetable protein produces excitotoxins such as glutamate (think MSG) and aspartate (a component of aspartame), which cause brain-cell death."

Health Risks or Rewards?

"I grew up in Houston on po' boys and the Wall Street Journal," said Robyn O'Brien. "I trusted our food system." But all that changed when one of her kids developed a food allergy and O'Brien began doing research to find out what's actually in our food and the companies behind it.

Her work led to the book,The Unhealthy Truth: How Our Food Is Making Us Sick and What We Can Do About It, and she's become an incredible crusader on multiple fronts when it comes to food. She's also been educating consumers about soy's double-edged sword.

To understand why, it helps to know a little history about soy. It's been cultivated, starting in China, for 3,000 years. While Asian diets have generally included soy it has been in small amounts eaten fermented -- primarily via miso, natto and tempeh. "Fermenting soy creates health-promoting probiotics, the good bacteria our bodies need to maintain digestive and overall wellness," wrote Vance. "By contrast, in the United States, processed soy food snacks or shakes can contain over 20 grams of nonfermented soy protein in one serving."

It's not that all soy is bad; in fact, eating it in small doses can be quite healthy, if it's fermented. But when it's not, that's where the problems begin. Soy is a legume, which contains high amounts of phytic acid. Phytic acid binds to minerals (like calcium, magnesium, copper, iron and zinc), interfering with the body's ability to absorb them (which is usually a bad thing). Soy is also known to contain "antinutrients," among them enzyme inhibitors that interfere with protein digestion. The Chinese figured out about 2,000 years ago that antinutrients and phytic acid could be deactivated during fermentation, but in the processed-food laden land of the West, we've chosen cultural ignorance in favor of quick and cheap. Most of the soy we eat is unfermented.

Another issue with soy is its high amounts of isoflavones, which can be good and bad (hence the double-edged sword). Isoflavones are a powerful antioxidant, writes Robyn O'Brien in her book, that can help boost immunity. They also impact estrogen levels and have been shown to have positive effects on easing symptoms of menopause.

"But that plus can also be a minus," writes O'Brien, "because isoflavones' very ability to boost estrogen production can also pose hazards to our health. For example, the FDA scientists point out, during pregnancy, isoflavones could boost estrogen levels even higher, 'which could be a risk factor for abnormal brain and reproductive tract development.'" There is also a risk of breast and other reproductive cancers for women and the potential for testicular cancer and infertility in men.

While there was much news about the American Heart Association endorsing soy in 2000, there was little attention given when the AHA changed its mind and quietly withdrew its pro-soy claims in 2006, O'Brien points out. She also learned that they were not the only ones who expressed concerned about soy. A study in the British medical journal Lancet in 1996 warned of the effects of soy in infant formula. The study found babies had levels of isoflavones that were five to 10 times higher than women taking soy supplements for menopause.

The effects in girls could be early-onset puberty, obesity, breast and reproductive cancers. Boys could face testicular cancer, undescended testicles and infertility. Additionally, O'Brien says, a 2003 British study conducted by Gideon Lack of St. Mary's Hospital at Imperial College London followed 14,000 children from the womb through age 6 and found that kids who had been given soy formula as infants seemed almost three times as likely to develop a peanut allergy later on.

As if all this weren't disturbing enough, there's also another reason to be alarmed -- most of the soy we eat is genetically modified to withstand increasing doses of weed-killing herbicides, and really, we have no idea what the long-term affects of that might be. So, what's a person to do? Stay away from soy as much as possible, which also means avoiding processed foods. And, even if we choose not to eat those things, some of us may end up getting them anyway.

"There are different sales channels that these companies are using to sell soy with little regard for the cost to people down the road," said O'Brien. "Soy that is not used in grocery stores, in restaurants, or consumed by livestock, is disposed of in school lunch programs, hospitals, and prisons."

One organization, the Weston A. Price Foundation, is actually engaged in a lawsuit on behalf of Illinois state prisoners who say they're eating a diet made of largely soy protein. "In their letters, the prisoners have described deliberate indifference to a myriad of serious health problems caused by the large amounts of soy in the diet," the WAP Foundation writes. "

Complaints include chronic and painful constipation alternating with debilitating diarrhea, vomiting after eating, sharp pains in the digestive tract after consuming soy, passing out after soy-based meals, heart palpitations, rashes, acne, insomnia, panic attacks, depression and symptoms of hypothyroidism, such as low body temperature (feeling cold all the time), brain fog, fatigue, weight gain, frequent infections and an enlarged thyroid gland."

While the soy industry has profited from the widespread adoption of its products here in the United States, other developed countries have taken a more precautionary approach and not allowed soy to become as pervasive in their food supplies in an effort to protect the health of their citizens, says O'Brien. But it's not just people who are at risk. The deleterious effects of soy can start with the seed.

Goodbye Rainforests, Hello Roundup

Glenn Beck recently chastised Al Gore about his meat eating, telling him that if he really cared about the planet he should put down his burger and pick up some Tofurkey. But unfortunately, it's not that simple. Increasing evidence is showing that soy production is also catastrophic for the environment. Just like a beef burger, a soy-based veggie patty may also be leading to deforestation, water depletion, and pesticide pollution. But it's also important to note that the vast majority of soy produced globally isn't used for tofu and veggie sausage -- it's actually used to fatten livestock and create biofuels (so, yeah, you may still want to put down the burger).

"Soy is a really sexy crop; it's fantastic. It's nitrogen fixing, it's full of protein; it's very rich and flexible," Raj Patel said in an interview with New America Media. "The tragedy is that the way we grow it today has turned a blessing into a curse because the way that soy agriculture works is monocultural, which means it takes over large parts of land. In Brazil, that means the Cerrado and the rainforest in the Amazon, and they are draining the water that is beneath that land. There are even some soy and biofuel plantations in Brazil where the International Labor Organization says there are 40,000 slaves working today. Slaves! In Brazil, producing biofuels and soy."

Brazil is one of the leading soy producers in the world, second only to the U.S. and poised to quickly move to the top spot. And overall, the growth of the world market is huge, with global production doubling over the past 20 years and 210 million tons produced a year.

But it has also led to problems. Countries across Latin America, including Argentina, Paraguay and Bolivia, are experiencing environmental problems similar to Brazil's. Rainforests are cleared, carbon emissions increase, indigenous and small farmers are displaced, aquifers are sucked dry, roads are built through sensitive ecosystems, and heavy pesticide use threatens waterways, soils and the health of locals. And as with all industrial monocultural farming, the rich (Monsanto, Cargill, and Bunge) get richer and the poor get poorer.

"The soy 'gold rush' has attracted fierce competition for land, leading to violence and murder," Marianne Betterly summarized in Mariri Magazine. "Hundreds of acres of rainforest are being cleared everyday, often by slave 'debt' laborers, to make room for more soy plantations."

So, we may get our cheap burgers and a deluge of soy-infused foods, but at great cost.

Adding to all these environmental problems with soy is the fact that much of the world's soy (and 85 percent of the U.S crop) is genetically engineered. Since the early '90s farmers in the United States (and now across the world) have been using Monsanto's Roundup Ready soy that is genetically engineered to be resistant to the herbicide Roundup, which is liberally sprayed on the crop to kill weeds.

Much of the promise of GE crops was that they'd lead to the use of less pesticides and herbicides, which threaten both human and environmental health. But that hasn't actually panned out. "Because herbicide-tolerant crops are designed to withstand application of weed killers, farmers can apply large amounts of pesticides without fear of harming their crops. The U.S. has seen more than a 15-fold increase in the use of glyphosate, or Monsanto's Roundup herbicide, on major crops from 1994 to 2005," Co-Op America reported.

And more damning evidence has just been released. A new study that just came out this week funded by a coalition of non-governmental organizations including the Union of Concerned Scientists, the Center for Food Safety, the Cornerstone Campaign, Californians for GE-Free Agriculture, Greenpeace International and Rural Advancement Fund International USA, found that GE corn, soybean and cotton crops have increased the use of weed-killing herbicides in the U.S. by 383 million pounds from 1996 to 2008.

The study will surely be accompanied by more alarms bells set off by small farmers, environmentalists and organic supporters. And it will be one more battle in the war against soy that's being fought on both health and environmental fronts. Perhaps it will make people think twice before eating soy products, processed food and even most meat.