289 comments on DrumBeat: June 27, 2007
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289 comments on DrumBeat: June 27, 2007
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“Of all races in an advanced stage of civilization, the American is the least accessible to long views… Always and everywhere in a hurry to get rich, he does not give a thought to remote consequences; he sees only present advantages… He does not remember, he does not feel, he lives in a materialist dream.”
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A new Round-Up has been posted at TOD:Canada.
(In which "star U.S. oil forecaster" Henry Groppe talks about oil sands and the importance of flow rates vs reserves, the Canadian oilpatch borrows its way into the danger zone, Bear Stearns is way past that zone, and the mother of all banks, the Bank for International Settlements, holds out the prospect of the next Great Depression)
Reading the BIS article was a real red flag for me. We all have a pretty good handle on what is up with the US economy but to read such a blunt assesment by such a powerful institution was the single story that stands above all the rest of the many that I have read in the last few months. Did anyone see mention of the BIS article on CNN?
I don't know about CNN, but BBC World TV News did mention it yesterday.
B(I)S first creates the crises, and then, at the very last moment, warns about them. That makes their warnings something to heed. They don't kid around. They want no-one to know what's being cooked up, but they also want to be on record as saying: "I told you so". Which they did this week.
Of course, in view of our finely tuned smoothly gliding free market system, all this is conspiracy ranting, we're leaving it up to the invisible hand after all to decide if our billion dollars from yesterday will still be there in the morning, and the FED is trying frantically to stop the housing bust, and Alan Greenspan has no higher priority than looking out for your very own personal happiness and satisfaction. Think Santa.
Can you explain how BIS "creates the crises"?
Bring down interest rates from 6.5% to 1% in a few months, raise M3 by 15% per year, and have Sir Alan go public telling people that homwownership is a G-d given right, that they now all can get through new loan arrangements. ARM's provide Americans with liberty!!! Power to the people.....
the right to bear ARM's?
LOL!
HeIsSoFly - Is this the end of the yen carry that you promised me would trigger the end of this fricking credit bubble, huh huh is it is it?
Yen up again as carry trade unwinds
http://www.bloomberg.com/apps/news?pid=20601083&sid=aKrojJoLTW60&refer=c...
I never promised anyone any such thing, but if you go to TOD:Canada, the Bear Stearns coverage should shake something awake. We wonder whether the alarm will go off first in Asia, not that it matters much down the line, but I had a talk with a trusted friend today and we agreed it, the trigger that is, might as well be this:
Merrill Lynch taking Bear Stearns to task. These are guys who play golf together, you know, and now they are adversaries?! It wasn't me, teacher, it was the ugly kid in the corner. Private and government, everyone is pointing fingers and talking to lawyers. It wasn't me.....
In the end there's but one problem: people play with other people's money.
By the end of the year we will be swamped in bankruptcies and lawsuits. If Bear Stearns goes, others will follow. There is exactly ZERO reason to believe they won't. And your bank is invested in all of them, and so is your pension fund, and and and.....
Sell your house while you can guys......
Sorry HISF it was Hurin that talked about the Yen carry.
I really appreciate reading you. I perceive your evolution in thinking on these subjects that are discussed here at TOD and believe that most are going through similar changes but are not as able (me) or willing to express them. For that again I thank you.
I value every ones perspective (how else would I know who to hate. I can't just go by what the MSM tells me).
Airdale, if you are present, I hope you can still post on occasion. I look at TOD as just another tool in monitoring WTF is going on in this crazy world. That’s all.
One must use the right tool for the job.
Damn, the dirt keeps slipping through the tines of this stupid rake when I try and hoe a row.
Love ya all, OOPS did I type that out loud?
EDIT - Oh man I just read this and it sounds like I have been tipping the cup too much
Big fat TOD troll found half full bottle of sarconol someone threw out window of car on overpass.
How's this for a strange connection between energy and finance...
MISC Postpones Bond Sale on `Market Volatility'
Hello Leanan,
I am no finance wizard, but it seems that if, in some locations, are peaking in natgas relatively soon: this company should have no problem selling stock shares to raise funds for building more LNG tankers. My feeble two cents.
Leanan,
That is completely nuts. The biggest LNG tanker firm globally not issuing bonds because of US subprime mortgeges?!
No, it is not nuts.
Financial types HATE volatility. The uncertainty and risk here is that one would have to sell bonds below par because of FUD related to the Bear Stearns hedge funds fiasco.
If I wanted to sell bonds I would wait for a strong and stable market environment.
Also, I think bonds to finance investments in LNG are inherently risky, because the stuff blows up so easily. Those tankers are floating bombs. And remember the very last scene in the fine film "Syriana"? Now that was a scary one.
I like the last line for the article.
"That may not last much longer."
River et al,
Seeing that you appreciate Stoneleigh's efforts in compiling the Round-up, I'm thinking you might want to leave a comment (at least one) showing that on the TOD:Canada site. Just to let her know......
She makes Canada distinct from the US , or let's say Leanan's Drumbets, in two ways
1/ obviously, the Canada energy content, which seems to be increasingly important stateside
and
2/ Stoneleigh is on the know about the financial quagmire, which is in a head-to-head race with peak oil for no.1 bringing down this society factor, as in who's first??
I, for one, find that interesting, and an added value. Nothing taken away from Leanan. Moreover, as I pointed out in a another comment today, it's the women that lead us..
Men smart, the women are smarter
(old reggae tune, google it)
"Woman is smarter than 'de man in every way!"
Old Harry Belafonte calypso tune. (Not reggae.)
Thanks for the kind words HISF :)
It is fascinating to read the Canadian Round-Ups -- we get virtually no news of Canada in the USA media, even though Canada is the #1 source of imported hydrocarbon, and our closest neighbor in countless ways. Thanks be to OilDrum for helping bridge the gap.
Yesterday I unwittingly started a rather silly pseudo-philosophical thread -- my fault for not being clear. The point was that the Disney Machine, powered by cheap oil and set in the fabulous Shangri-La of California had converted Yankee pragmatism into magical thinking -- which could be sustained only so long as the oil lasted. The point about David Hume was that people who were forced to abandon belief in deductive reasoning would likely naturally gravitate to magical thinking -- especially if it were so attractively packaged as the Disney package. Most people, in my experience, are extremely uncomfortable with skepticism and either collapse into rigid orthodoxy or New-Age wu wu. Students of Hume (I count myself a reader, not a serious student, and I'm sure I miss a lot of his message) must recognize what their position sometimes creates-- if unintentionally.
Enter Canada -- the new Source. The magical thinking can continue for a while, bolstered by the promise of Endless Tar Sands. It looks, from the Round-Up that the magical infection is spreading to our pragmatic cousins up north -- I sincerely hope their immunity to claptrap is stronger than ours down south.
I am a student of Hume and taught philosophy for about thirty years. Personally, I prefer the empiricism of Locke and Aristotle to that of Hume, but as the fattest philosopher in history, Hume deserves a special place in our affections.
Note that his famous skepticism may be related to his denial of paternity in a case where he fled Scotland to avoid having charges placed against him in the Church. He did lead a most interesting life, and he was prudent enough to leave his most controversial work to be published after his death.
In his own life (as opposed to his philosophy) Hume was not at all an extreme skeptic. When he lost his faith in Christianity it was a crisis, and allegedly he gained sixty pounds in about ten weeks. Quite a character he was . . . .
Thanks, Don Sailorman. I learn so much from this site! A great corrective to the mind-numbing general media.
Pardon my ignorance, but it doesn't seem to me that adding inductive reasoning to deductive reasoning resolves the crisis of the general failure of pure reason. It also seems obvious that most people instinctively avoid rational thought of any variety (using the power of reason only to justify a previously made emotional decision.) And so Hume was mostly giving academic heft to the common understanding. Then, what happens when you can't count on reason and you lose your faith? -- "When Prophesy Fails"?
People don't embrace "Peak Oil" because it is a rational, intellectual position, arrived at through inductive and deductive reasoning, and most people just take the world on faith. For now, the oil just keeps coming, and it is in the interest of the MSM to tell them it always will.
As philosophers have understood ever since Aristotle stated the point: Inductive reasoning can NEVER yield certainty. That is why any claim to knowledge in science (which is based mostly on varieties of inductive logic) is always open to revision.
Hume's skepticism applies only to questions of absolute certainty--not to statements of probability. In many of his writings (especially the historical ones) Hume uses inductive reasoning and feels no need to justify this use.
With deductive reasoning, if all the premises are true, and if the argument is logically valid, then the conclusion is 100% certain.
(using the power of reason only to justify a previously made emotional decision.)
Not to beat a dead horse, but is it possible to have a purely rational decision purely independent of some kind of sentiment? This is another one of Hume’s findings, that reason is a slave of the passions. In order for me to use reason I must make a value judgment first. I’m sure I’m going to get some real disagreement on this one, but twist and turn as you might reason is only a tool for what you first feel is valuable.
Hume lifted a lot of his ideas from the best-seller by Adam Smith, "Theory of Moral Sentiment," which is well worth reading today. It was a "prequel" to "Wealth of Nations," and it makes the latter book much more understandable and readable.
Continuing to beat dead horses-- I'm going to quit after this one! I read TMS a few years ago. It is interesting, and certainly make the Wealth of Nations more clear. But it seems to me that it is grounded in cultural bias -- how could it be otherwise? One's own experience is the only possible guide to understanding human nature. Every understanding is ultimately private.
I use deductive reasoning every day in my business (medicine)-- but the premises are often uncertain, and so the entire edifice is shaky -- even if the logic is sound, which it sometimes isn't. Still, with a good dose of faith, we get by....
Aristotle was the first of the great empiricists. His father was physician to King Philip of Macedon (Alexander the Great's father), and Aristotle was well acquainted with medical reasoning and its limitations. In the olden days, if you were doctor to the king and the king died prematurely or not from obvious battle wounds, then often the physician was killed (to encourage the other doctors, no doubt). IMO, medical reasoning is a good example of a blend of inductive and deductive logic. Consider for example the perplexing connection between mental and physical disorders:
We know that the mind can make you physically ill (psychosomatic disease), but we also know that chemical imbalance in the body can cause disorders such as bipolar or depression, and probably schizophrenia as well. Thus with cause and effect so intertwined (and positive and negative feedbacks both at work) it is no wonder that physicians have to pay so much for malpractice insurance (which is still pretty soft compared with being killed just because your prominent patient gets appendicitis or something).
Don, we have had our differences but I just loved your comments on this thread. We are very lucky to have a philosophy professor on this list.
Thanks again,
Ron Patterson
Don, it is amazing the great minds that period of history produced.
It also seems obvious that most people instinctively avoid rational thought of any variety (using the power of reason only to justify a previously made emotional decision.)
I dissent: ordinary people are very rational in many areas, including (often) their own areas of expertise and their immediate self-interest. I'm not into it, but I hear people analyze baseball games -- very rational arguments.
I am unable to classify all the reasons for departures from reason. But one biggie is denial. If reason leads to a conclusion one finds immensely threatening, then it is denied. Moreover, it is denied very rationally. The person in denial is very sensitive to where logic is leading, and takes evasive action, sometimes extremely skilful action.
Without emotion we cannot reason at all -- because we don't care about anything. It takes caring to put in the effort. But Freud is right on one major point -- there are mental icebergs that we avoid. All of us have these icebergs, just not the same ones.
I have experienced these things with PO to some extent, but much more so with 9-11. If I were energetic and younger, I would write a book just on the psychology of this one event.
Afterthought. I started out in mathematics, long ago. I still return to it when I get depressed or stressed out. Reasoning in this case is a form of escape. Somehow it is easier to carry out chains of reasoning if one does not have an overwhelming stake in the outcome. It's too embarrassing to point out instances of my failures to reason -- and in some cases I am no doubt in denial.
davebygolly - Regarding 9/11. I was happier before I knew and envy those who can still deny. As for escape, astronomy does it for me. The 2003 Hubble ultra deep field is the most significant photo ever taken. One can look at those 10,000 galaxies in a tiny patch of black sky and realize that the failures of H. sapiens don't mean much in the big scheme of things.
Some do, but I would say the vast majority of baseball fans do not. There's considerable friction between the "stat-heads" and the fans who just want to watch the game. And even the stat-heads tend to have their blind spots.
Even when there's money on the line - fantasy baseball - people can be less than rational. Some use astrology and that sort of thing, as well as OPS, VORP, etc.
And of course, baseball fans (and players) are among the most superstitious people in the world. IMO, a natural result of an activity that is highly dependent on luck. See fishermen and gamblers for other examples.
No doubt many people are in denial about something, maybe all of us, but it seems from non scientific observation that Americans are more in denial than Europeans...maybe because of our shorter history and having never been over run by an invading army or our tv culture or our MSM. I think as a nation we are less informed and more niaeve than Europeans. In Europe politics, wars, religion are all fair game for conversation in pubs, while riding trains, or on street corners. In America the refrain is 'never discuss politics or religion.' Isnt that foolish? Since when did an exchange of ideas become taboo? Certainly our founding fathers discussed all these topics and great many more and common people discussed them in toll houses and even in church gatherings. Labor movements, womens sufferage, abolition, all came out of people talking to other people. When did this fear of discussing important topics come into vogue? More important, when will it go away so we can carry on an exchange of ideas again? Maybe the greatest damage that tv has done to America is to limit discourse and channel discussion to the mundane. We are here carrying on discussion on TOD because we want to discuss issues that are important yet if we go anywhere else and attempt to start a conversation about CC, PO, or the economy we will most likely not feel welcome.
Ahaa! There lies the problem, the confusion between deductive reasoning, and inductive reasoning. A very common misperception, unless one studied logic in college. This article explains it all:
http://en.wikipedia.org/wiki/Deductive_reasoning
Most scientific evidence is inductive, built up by observation and experimentation.
While having no experience with Hume, I do respond to your call about 'Magical Thinking'.. it brings to mind the adage,
'Any sufficiently advanced technology should be indistinguishable from Magic' (Vonnegut?) .. to which I might amend some versions that would describe the Magical possibilities derived from sufficient amounts of cheap energy (which beyond Coal, Gas and Oil could include Slavery, to look back into the American Cultural Assumptions about where our bounty came from), and sufficient access to and exploitation of Land and Natural Resources. ie, even if the upper classes were simply born on third base, instead of getting to conclude that they'd Magically hit a Triple, that the Base itself was predominantly Stolen to begin with. But if you happily ignore this inconvenient history, you can create any number of Magical Economic and Social theories based on how easy it is to get to and remain at Third Base.. and these won't be truly challenged until the energy and natural resources that are burning to keep you there start to thin.
Of course people in many ranges of Western class structure have their versions of these fantastic constructs that justify our recent wealth.. it's just easiest to pick on the Rich.
'Blessed are the Cheesemakers..' -Life of Brian
Bob Fiske
I think it's Arthur C. Clarke.
I could be mistaken here, but my recollection is that Clarke lifted (or modified) the quote from the famous book by Bronislaw Malinowski, "Magic, Science, and Religion."
It's known as Clarke's Third Law
I am absolutely 100% dead certain without a doubt that King Solomon said it first. Reason would tell us that it must be so because ol Sol said 'there is nothing new under the sun.'
Nope, it was the preacher in Ecclesiastes. Chapter 1 verse 9. I may be an atheist but I know my Bible.
Ron Patterson
Probably Solomon did write parts of Ecclesiastes; he had to take a break from all those wives and concubines once in a while. In particular, he probably did write "The Song of Solomon," though of course nobody can be sure.
Naw, Moses did not write the first 4 books of the Bible, David did not write Psalms. Moses could not have not written the details of his death and David could not have written about being carried away to Babylon, 200 years after his death. And Solomon did not write The Song of Solomon and he certainly did not write Ecclesiastes.
It is extremely unlikely that the son of David and Bathsheba wrote those words. In reality we have no idea who wrote most of the books of the Bible. They were give authorship of noted holy men just to make them more authentic.
Note: Solomon was not the eldest son of David, that honor belonged to Amnon then Daniel then Absalom. Solomon was actually David's tenth son and the fourth son by Bathsheba. David had twenty sons by his wives. There is no count of sons by concubines and of course no one ever counted daughters in the Bible. But Solomon was Bathsheba's favorite son and she made David promis to make him King. I would consider it unlikely that Solomon would have been made, by his older brothers, to keep their vinyards.
Ron Patterson
A guy with more than a thousand wives and concubines could very well be the author of:
"Vanity of vanities, . . . ."
But of course we can never know for sure who wrote what in the Bible, who did the editing, and who did the revisions.
One thing we do know about the Old Testament is that a lot of it is fairly accurate history. Much is poetry. Some of it is pure spite put in by the priests.
"A lot of it is fairly accurate history" - true perhaps for sufficiently small values of "lot" and "accurate".
Not so: archaeology finds have given substantial support to many of stories in the Bible.
Some stories are almost certainly true, for example the story of Ruth and Boaz. It is a story about intermarriage between a Jew and a non-Jew--and it has a happy ending. The editors of the Old Testament were rabidly opposed to intermarriage (fanatic on the topic), but they could not edit this story out because it is part of the geneology of King David--who most certainly existed, probably killed Goliath with one lucky shot, and who lusted after Bathsheba and killed her husband Uriah to get her. He also probably did kill tens of thousands of Philistines--very much into genocide. See what the Old Testament said about the Amelakites--talk about a vengeful God . . . .
The Old Testament is all about sex and violence--not edited for sweetness and light. As stated elsewhere, some of it is poetry and not intended to be taken literally. The idea of taking every word in the Bible as the literal truth is a fairly recent aberration and not subscribed to by any notable theologian that I am aware of.
Well...you've now downgraded from a "lot" to "some". I have no issue with "some".
And that "archaeological finds have given substantial support" simply means that many of the stories had some true basis, but given the time involved and the medium of communication, it's hard to believe much accuracy has been maintained, assuming that was even the intent.
I forgot where I read it (probably Dawkins) who stated if you want someone to become an atheist make them read the Bible.
I became an atheist at about the age of 23 though I had strong doubts as a teenager. But reading Thomas Paine's "The Age of Reason" did it for me. It was all about the Bible and the horrible things in it. Yes, reading the Bible with an open mind will definitely make you an atheist.
Ron Patterson
How can you prove the nonexistence of a God? Now don't give me any lame Marxism or Freudianism.
Aristotle thought he proved the existence of a Prime Mover God, and it is just about impossible to refute his proof. Indeed I've never seen a convincing refutation.
Most of the arguments for God's existence do not hold water, and I can rigorously prove the nonexistence of a Christian God that is all powerful, all knowing, and all benevolent.
The burden of proof is on the God. No need to prove God's non-existence. No non-God could do that.
cfm in Gray, ME
Don, now your knowingly engaging in logical fallacy. You cannot prove the no existence of god no more than you can disprove the existence of a giant teapot orbiting the sun. I am really suspect of someone who has knowledge of philosophy and logic and then trots out this canard knowing that it is wrong. As far as Aristotle, who says there is a beginning? And what or who made god?
By Aristotle's reasoning, the Prime Mover (God) is eternal. Why? Because infinite regress is "unsatisfactory" (and probably self-contradictory).
IMO a strong case can be made for agnosticism--but not for atheism.
BTW, Aristotle's idea of a "Prime mover, unmoved," is very far distant from the Christian idea of God. The early Christians lifted a lot of their doctrine from the neo-Platonists, whose ideas were in strong contrast to those of Aristotle--e.g. in regard to immortality of the soul.
(Aristotle said the soul died with the body.)
Do you think there is a strong case to be made for lack of belief in unicorns, leprechauns, Santa Claus etc.?
If so, then why not a strong case to be made for lack of belief in gods? (Other than allowing one to define "god" as being so vague and nebulous that there's no purpose in calling it as such).
Or do you explicitly mean "strong atheism", as in, a high level of confidence that gods do not exist?
I actually wrote a book about this and self-published it recently: www.datingtheoldtestament.com.
I suggested that David did write some of the Psalms, though not the ones dealing with the Babylonian captivity. I did date the first five books of the Bible to the time of Moses.
Any sufficiently advanced technology IS indistinguishable from magic. The distinction is important - he wasn't positing a REQUIREMENT on forms of technology, he was describing the appearance of sufficiently advanced technology (a gun to C.14 Europeans, an Ipod to C. 20th Europeans, godknowswhat to early C.21 people everywhere).
"The cheesemakers?" Biggus Dickus runs the world, and he doesn't like cheese.